EDITORIAL: Prime Minister Shehbaz Sharif listed the successes of his administration on completion of one year since he took oath and assumed charge as the country’s chief executive.
While the task of assessing an administration’s achievements/challenges after being in office for a year is usually undertaken by media outlets, yet, with the incumbent Prime Minister taking the lead in this respect it becomes incumbent to evaluate his claims.
There is no ambiguity in his claim of success in four important aspects. First, as chair of G77 plus China, the Sharif-led government, notably the Federal Minister for Climate Change, Sherry Rehman, did an outstanding job in establishing a Loss and Damage Fund for Vulnerable Countries during the November 2022 Conference of Parties (COP27) under the United Nations Framework Convention on Climate Change.
In addition, with assistance from the UN Secretary General, Pakistan generated around 9 billion dollar pledges worldwide to assist the country deal with the devastating summer 2022 floods that impacted 33 million Pakistanis.
And, while the Prime Minister’s claim that the government’s rescue and rehabilitation efforts were decisive and provided social protection to millions of people, it was far short of reaching the daunting number of 33 million victims of floods with Bilawal Bhutto-Zardari hinting at his resignation in the first week of this month, if the bottlenecks to assistance to flood victims are not removed.
Second, the Prime Minister claimed that “we have largely succeeded in establishing Pakistan’s credibility as a partner and friend.” While Foreign Minister Bilawal Bhutto-Zardari has been much criticised for his many foreign visits - 20 in eight months, three times to the US and the UAE, twice to Saudi Arabia, China and Uzbekistan - yet with the Foreign Office 26 December press statement noting that all the official trips were at his own expense (as were the Prime Minister’s official trips) one can discount any cost to the taxpayers.
While to evaluate the actual impact of Foreign Office initiatives is not instantaneous, yet one can measure their success by the fact that China and Saudi Arabia have met their assistance pledges to Pakistan, a prerequisite for the success of the stalled ninth International Monetary Fund (IMF) review, with only UAE’s one billion dollar pledge outstanding.
In this context, however, it is relevant to note that the trust deficit between Finance Minister Ishaq Dar and the Fund team has widened because of his earlier bravado and more recently his insistence on policies that are clearly violative of not only the spirit of the agreement with the Fund (read no control over the rupee dollar parity) but also the letter of the agreement (read no untargeted subsidies especially to the elite).
Third, Pakistan exited from the Financial Action Task Force (FATF) grey list in October 2022 and while the previous government may claim that it fulfilled most of the technical and procedural requirements of FATF’s action plan, yet Sharif rightly stated that the exit from the grey list was on his watch.
And finally, Sharif noted that there has been a renewed focus on solar, hydel and coal power projects with the objective of replacing the costlier sources of power generation.
To ensure that lessons were learned, one would have hoped that the Prime Minister had acknowledged that the costlier sources of generation plants were not only established during PML-N’s (Pakistan Muslim League-Nawaz’s) previous tenure (2013-18) under the China Pakistan Economic Corridor on terms favourable to the Independent Power Producers (IPPs) but that he as the Chief Minister Punjab committed to ending load shedding failed to take the views of sector experts on board that accounted for coal-fired plants established far away from coal source with cost and health implications.
However, sadly, these achievements pale into insignificance, given the current appalling state of the economy. The Prime Minister’s narrative on the state of the economy reflective of party position leaves no one remotely convinced.
He claimed that all predictions of default turned out to be false alarms; however, the truth of this assertion would depend on not only the IMF pending review to be declared a success but with the ongoing limitations on payments for imports against letters of credit and opening of ‘at sight’ letters of credit has led to the piling up of containers at our ports and depletion of raw material stocks leading to closure of industrial units is, in effect, a technical default.
Sharif referred to revival of the economy but even the most ardent PML-N supporters would be sceptical with inflation at 35.4 percent, a policy rate of 21 percent (implying a negative rate of return – incidentally a divergence that is much higher than in March 2022 when the policy rate was 9.75 percent and inflation was 12.7 percent); and with recent growth projections on average of 0.5 percent by the three international lender agencies and domestic economists claiming that growth would be in the negative territory this year one is hard pressed to lend any credence to the Prime Minister’s optimism with respect to the economy.
We hope that the Prime Minister would acknowledge that the so-called reforms that his administration has implemented are tantamount to passing on the buck to the consumers and low-end taxpayers (heavier than ever reliance on indirect taxes whose incidence on the more vulnerable is greater than on the rich), the industry is in crisis with large-scale manufacturing growth in the negative, leading to widespread unemployment, while structural reforms with the capacity to end the ongoing impasse in the energy and gas sectors through improving governance remain pending.
Copyright Business Recorder, 2023
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