A tale of two deals

It was the best of deals, it was the worst of deals, it was the spring of hope, it was the winter of despair (that too, without gas).

Pakistani politics is infested with a tale of two deals these days. First is the government’s on-again off-again deal with the IMF. One day we hear the government is ready to sign an IMF deal that is in the best interest of Pakistan. Next we hear the government refusing the IMF deal and the refusal is, of course, in our best interest.

This is the most amusing aspect of the PTI. No matter how many U-turns it takes, its actions are always in the best interest of the country. Conversely anything which the previous government did was always against the interest of the country. So the same IMF deal can be a spring of hope if done by the PTI or a winter of despair when undertaken previously.

Last winter, the IMF representatives talked about the fair market value of the rupee being Rs125 to a dollar. They also emphasised raising interest rates to slow down the economy and reduce demand for imports.

The State Bank devalued our currency in December 2017 and in March 2018 by five percent each to 115 to a dollar in consultation with me and with information to then PM Shahid Khaqan Abbasi. (There was never any dispute about who knew what and who took responsibility). Given the more difficult external economic environment since the Panama Papers, I was thinking of a dollar rate between 125 and 130 by June 2019.

Although I was agreeable to the gradual devaluation of the rupee, I was reluctant to support raising interest rates. I didn’t think we needed to slow down the whole economy just to bring imports under control. We could easily address that by devaluation and duties.

Now the PTI government has not only hurriedly devalued the rupee to 140, it has also raised interest rates four times (since we left) to a policy rate of 10.25 percent, raised the rates for power and gas, cut development expenditures, and imposed more direct and indirect taxes.

These steps have brought in a recession by slowing growth, growing unemployment, increasing inflation and a decline in investment and manufacturing. And what’s the point of these hardships imposed on our people if we don’t even have an IMF programme?

We got a $3 billion loan from Saudi Arabia which we have to repay. Yet we have lost that money already in the market. And now, as the government is belatedly going to the IMF, the Fund is still asking for more belt tightening. So all the hardship forced on our people counts for nothing? One fears that the people of Pakistan will have to suffer even more in the months to come.

So far this government hasn’t done anything positive it can talk about. No progress on housing, nothing on jobs, zero on transparent or efficient government, zilch on police reforms and certainly no revolution in education or healthcare. Many of these initiatives don’t require money. Just focus and intelligence. But those commodities, never in abundance, are in particular short supply in Islamabad these days.

This government is astounding in the breadth of failures it has achieved in such a short time. The seven-decade history of Pakistan doesn’t do the PTI’s misrule justice. You have to go back to the days of Mughal emperor Aurangzeb Alamgir to find a worse government. (And this in spite of the fact that our foreign policy has been quite successful of late due to, shall we say, Pervaiz Khattak’s colleagues at the defence ministry.)

This then brings me to the second deal that is being talked about these days: the supposed deal between the state and Mian Nawaz Sharif. This is the deal that Prime Minister Khan talks about incessantly by saying he will not offer anyone an NRO. The first question that comes to mind is: do we have rule of law or rule of men? And if we have rule of law then how can a prime minister offer a deal to someone undergoing proceedings in a court of law? Is PM Khan suggesting that the honourable judges of our courts do not decide cases on merit? Is that the confidence he has in our judiciary?

Suppose the PML-N had quietly asked the prime minister about a deal. In that case, PM Khan would have said no and he would not have gone public everyday to say he won’t offer an NRO. It is precisely because the PML-N hasn’t asked for a deal that he is saying he won’t offer it.

But what are his reasons to talk about an NRO ceaselessly? One reason could be that even with so much belt tightening he hasn’t been able to close the IMF deal; that the PTI has forced the economy into a recession; that there has been no progress in any other area, be it housing, employment, governance, police reforms, provision of gas, etc. And – absent any achievement – PM Khan has no choice but to constantly talk about an NRO and shore up his anti-corruption credentials.

But then this begs the question: if the PML-N were so corrupt, and given that the PTI has been in power now for half a year, why aren’t we seeing any improvement? Why do we only see things getting worse? Does this not force one to conclude that the PTI team is much less competent than the PML-N team? Sadly, even ardent PTI supporters have now stopped accusing Imran Khan and his team of competence.

Another view of Imran Khan’s proclivity to talk about the deal is that just as the previous NAB court verdict against former prime minister Nawaz Sharif was stayed by the Islamabad High Court, so this new verdict may also be stayed and Nawaz Sharif may be allowed out on bail again.

Now if Nawaz Sharif and Shehbaz Sharif in due course come out without being proven guilty by the courts and there are no specific and credible charges of corruption against them, not even a JIT report that shows multiple fake accounts, layering and billions of rupees of transfers, then what credibility will the PTI crusade have?

The raison d’être of Imran Khan’s entire politics is based on Nawaz Sharif being corrupt. If Nawaz Sharif is not corrupt, then Imran Khan is politically nowhere. Since he doesn’t have any ethnic card, and he certainly doesn’t have a competence card, the only card he has to play is the corruption card. Lose that and the PTI house of cards tumbles.

This is the reason Prime Minister Khan is trying to cast aspersions on other institutions and suggesting that Nawaz Sharif will be let go because of a deal as opposed to the normal course of justice. This makes everyone else looks bad but makes Imran Khan look good. But is maligning institutions just to look politically good the right thing to do?

The writer has served as federal minister for finance, revenue and economic affairs.

Twitter: @MiftahIsmail