By Babar Ayaz
While the perception was that the PTI would come out with some of the achievements of its government, this was a misperception. Because it seems that the PTI just wanted the 100 days to know what to do as it had no clue about the issues faced by the country.
After the first major show of strength at the Lahore rally at Minar-e-Pakistan in 2011, I had written for this paper that it was confusing that Imran Khan-led change would be from “what to what”. After so many years, when he was ‘selected’ — to borrow Bilawal’s phrase — Imran Khan needed 100 days to figure out the way forward. And not start implementing the reforms as it was generally perceived.
Consequently, the expectations of the people from the 100 days hype fell flat as it was made clear that the party had misread the serious economic challenges by focusing on a single obsession — corruption. Indeed, corruption is an issue, but to build people’s expectations that they would be able to bring back US$11 billion of Pakistanis stacked abroad — God only knows how this figure was arrived at — is obviously just a rhetoric. It would take a long time in signing Mutual Legal Assistance treaties (MLA) with 26 countries and ratifying them by the Parliament. Even when the MLAs would be signed, Pakistan will have to prove in the courts of the respective countries that the money was laundered by Pakistani politicians and businessmen.
In many cases, these assets could be legal and may have been transferred by the people through legitimate means. The countries which host these assets would have to also admit that they have provided a haven to illegitimate income of the asset holders. This would not only be the case of Pakistanis because much larger amounts have been invested by the nationals of other countries. For instance, UAE and UK have billions of dollars invested in real estate by the nationals from all around the world. However, one cannot dispute Imran’s good intentions and the efforts he wants to make to bring the money back to the country. How successful he will be in this endeavour during his tenureis doubtful. One cannot pin much hope to this source of revenue to bring the country out of its present fiasco.
The naivety of Imran Khan and surprisingly of his economic adviser, Asad Umar, can be judged that while it was written on the wall that the yawning current account gap could not be bridged without the IMF’s tough package, they vehemently declared that they would not go to IMF because of its tough conditionalities. But that was when they were not yet in power. This was the major U-turn they took after reality hit them in the shin. They had not considered that the interim finance minister Shamshad Akhtar, who is an astute economist, had prepared the ground with IMF for the next government, realising the country’s needs
It was ironic that after all the good talk of taking steps to alleviate poverty, by the close of the next day after Imran Khan’s 100-day speech, the dollar value shot up to Rs138 from around Rs133 after touching Rs 144 in the mid-day session. Thus, showing a Rs five fall in a single day. The State Bank corrected the interbank rates perhaps after the strong reaction from the market and opposition to the Rs10 depreciation in a single session to bring it down to Rs 138. Ever since the PTI has taken over, the rupee has had a freefall of around 12% with the value standing at Rs 123.25 when the PTI was sworn in mid-August. This is automatically going to have a major impact on all imports of oil and other essential items. Already, the inflation had gone up during the last few months from less than 5.8% in August, 2018 to 6.8 percent in October, 2018.
Mind you, this is the rise in consumer price index, which is much lower than the sensitive price index that affects the common man on a day-to-day basis.
Another inflationary step taken by the government is the increase in the inter-bank borrowing rates, which have been raised in a short span by 2% since the PTI government has taken over. This will directly affect the GDP growth rate which is now being estimated by some analysts to fall to less than 4% by the end of this fiscal year. This is in sharp contrast from the earlier projections that GDP will grow to over 5.8%. GDP growth rate is usually considered the magic figure with which all economic indicators are linked, including the rise and fall of per capita income and revenue projections. Higher interest rates always slows down the economy and result in the contraction.
On its own accord, the PTI had admitted in its progress report that it could only achieve 18 of the 34 deliverables set by it in the first 100 days. Even this success is regarding setting up some systems in place, such as the Naya Pakistan Housing Authority, which is a duplication of the existing Pakistan Housing Authority.
Each government had tried to persuade the banks to give mortgage facility to people and at times, the State Bank made it mandatory to give a certain percentage of loans to the housing sector. However, the banks have either shied away from that or the mortgage rate is so high that the common man cannot afford it.
Instead of experimenting with new economic models to increase housing in the country, the government should have looked at internationally-acknowledged successful models, such as Khuda Ki Basti and the model adopted by the Municipal Corporation of Greater Mumbai of vertical housing in partnership with the private sector to give decent houses to the people living in slums on encroached lands.
The anti-encroachment drive all over the country may get some land free of encroachers, but it is also creating unemployment of small businesses. The drive should have been started after offering alternative places of business and giving adequate notices. At present, some of them have been removed after giving only a one or two week notice where it was not possible to relocate themselves in such a short time in the absence of alternative land close to markets which consumers frequently visit.
All other schemes about which the PTI prime minister talked excitedly were not new. Many previous governments had talked about such poverty alleviation schemes by subsidising the livestock and poultry sector.
As far as the issue of U-turn is concerned, I think the media hype about it has been made possible much because, these days, umpteen channels have footage of what the leaders have said while in the opposition, contrary to what they are doing now. The only benefit of this campaign is that it would make the politicians more responsible while criticising the government when they are in opposition. And the frequent U-turns show that the leaders are just demagogues without any far-sight or vision. Now the PTI leaders quote that Allama Iqbal and Mr. Jinnah also took a U-turn. That was also because of a lack of vision and ability to fathom that countries set up by exploiting religion would be consumed by extremist religious forces.
(The writer is the author of What’s wrong with Pakistan? And can be reached at email@example.com)