PAKISTAN has negotiated a difficult turn in politics neatly. The smooth change is acknowledged by the business community but it is not expecting wonders from Prime Minister Raja Pervez Ashraf.
The community views PM’s renewed focus on energy positively and hopes for greater cooperation among political parties and key institutions on minimum common economic programme to avert hard landing of a wobbly economy.
The third quarterly report of the State Bank of Pakistan released on June 22 reviewed the state of the economy in the following words: “Although Pakistan’s economy has shown some recovery in terms of GDP growth, (3.7 per cent during fiscal 2012 up from three per cent in 2011), key macro indicators still remain weak.” Specially, while inflationary pressures have eased compared to last year’s, inflationary expectations are entrenched.”
“The deterioration in external account has been less than expected, but financing the current account deficit remains challenging: and lastly, despite strong growth in tax collection, there are pressures on fiscal account.”
“Furthermore, energy shortages and low investment continue to compromise the economy’s capacity for growth”, the report says in its opening remarks.
The discussion with economists, government functionaries and businessmen over the change of parliamentary leader last week centered more on the process. The merits of the candidate’s selection by the dominant Pakistan People’s Party did not seem to bother them so much. Some of them believed that loose grip of the new PM on complex issues facing the economy may allow the economic team freedom to carry on with their work.
Economists expressed some anxiety over the move of the judiciary to press the NRO implementation issue all over again besides prompting or forcing the president to forego his party position.
“It generates an element of uncertainty that scare businesses”, Dr Hafeez Pasha, a distinguished economist who heads the advisory panel of the government commented over telephone from Lahore.
“It is wonderful that the change occurred smoothly. I do not see any change in the economic policy. The economic team will implement the budget that was passed by the parliament before the exit of the last PM”, he said.
Some senior retired bureaucrats, who know the functioning of the government from inside, were skeptical.
“Like his predecessor, the new PM will compromise, often harsh but needed economic decisions for political expediency. For me the situation has slipped from bad to worse. He will be as much a liability for the economy as his predecessor. His reputation related to rental power is not going to help either on the negotiating table with development partners”, a former federal secretary who served in multiple economic ministries, commented from Islamabad.
“A PM need not be an economist to steer the economy out of difficult patch. He needs to be committed and decisive. His campaign to please everyone to get into PM chamber should end as soon as he takes oath of office. He should have a good sense to choose right set of economic advisors and more importantly officers to implement the agreed programme”, another senior officer, who served in the kitchen cabinet of Gilani, said.
He lamented deteriorating work culture of top heavy administrative set-up.”I hold administration as much responsible as the politicians. Our officers are arrogant and ineffective. They detest political leadership and live in the past. There is need to reorient the bureaucratic mindset to enable it to deliver”, he added.
“Despite problems facing the economy, I am happy that Pakistan has displayed capability to work within the constitutional framework under extreme pressure. I see it as a promise of better future”, Eizaz Sheikh, a business leader with interest in cement sector said commenting on the change.
“The judiciary has conveyed the message loud and clear. No one is above the law and respect of superior court orders is mandatory irrespective of clout or position. Now they need to step back and let the government function”, he said.
A few commentators contacted made a case for holding of fresh elections to ward off immediate political risks.
“The announcement of election schedule will set the ball rolling. It will charge the environment, direct the nervous energy of stakeholders towards something purposeful, dissuade the judiciary from adventurism, bring out hidden wealth, and give hope to the people to partake in a change”, a textile tycoon suggested.
“The country needs a fresh start. It is naïve to expect an outgoing government to take required economic measures so close to elections. Let the people elect the next government and peaceful transfer of power take place. Then, the new government should create a conducive business environment, fix the economy and provide opportunity to the people to live in dignity”, he concluded.