Despite initial hiccups that saw the eviction of foreign consultant Stefan Dercon and the horror of reassignment of leadership to a Dar-led committee, the launch event for the Home-Grown Economic Plan finally took place yesterday, before the sunset of the year 2024. Although a final comment is reserved until the document is made public, key observations from the launch event are recorded below for the audience’s consideration.
First off, a C- for the time it has taken the Shahbaz-led government to finally come up with an economic strategy. So far, the prime minister and his team (minus the finance minister) have collectively been in office for 27 months. The fact that it took seasoned leadership of a political party that boasts a three-time ex-prime minister, a four-time finance minister (now deputy PM), a three-time ex-chief minister, and a three-time planning minister under its wings this long to come up with an economic plan should give all of us pause.
In an ideal world, a prime minister who has been demanding a Charter of Economy for the better part of the last decade would have presented his competing vision for the country back when he was still the leader of the opposition (2018–2022). At worst, the contours of the charter should have made it to his party’s manifesto going into the general elections of 2024. But alas. Enough bickering over the past.
Second, an A+ to the planning minister for letting the finance czar open the event. The inter-office politics within the economic leadership is no secret. So, for Ahsan Iqbal to let finance minister Aurangzeb be the face of the government’s vision is a win, especially considering that Deputy PM Dar had wrested the drafting of the plan away from the Stefan Dercon-Ijaz Nabi-led team, and may have wished to be the face. Traditionally, the Planning Commission has played custodian to various past Five-Year Economic Plans and Medium-Term Development Frameworks. Thus, the dear ol’ professor could have easily tried to reserve the star role for himself but didn’t. So, kudos to him for showing grace!
Third, a B- on the attendance. The entire PML-N leadership — especially economy-related ministers — was present, along with provincial governors, key foreign ambassadors, and business leaders from the private sector. However, coalition partners were conspicuous by their absence. Given the hybrid nature of the regime, the absence of uniformed stakeholders was noticeable. Proxy attendance could have been marked by surrogates such as the PCB chairman or even the chief patron of APTMA, but they were also absent. Similarly, other stand-ins such as the federal ministers from MQM and PML-Q failed to mark attendance as well.
And therein lies the dilemma. The launch event deserves an A+ if it signals that, starting in 2025, SIFC-led economic (mis)management will finally take a backseat and civilian leadership will resume control of economic stewardship. But if the absence of key officeholders from SIFC indicates the plan does not have the full backing of those who truly control the reins (and have no intention of letting go), then the plan may as well be declared dead on arrival. Whether the miracle can still happen, we shall soon find out.
Now on to the main event. The finance minister’s speech was the headline. The man made it obvious he is no fan of heady plans, and instead is a believer in getting things done on the ground. Thus, his message was on point, keeping it crisp to three pillars: let the private sector take the lead in investment; focus on export-led growth; and optimize public finance. Other highlights such as promoting only efficiency-seeking FDIs, targeting accelerated cuts in tariffs on inputs, and bringing the average tariff down to 14.5 percent from 19.5 percent were certainly music to the ears.
Old talking points such as the transformation of FBR, implementing a regulatory guillotine, and creating an independent tax policy unit to ensure policy continuity were repeated. But as the minister himself insists, “we all know the what and the why part.” So, the proof of the pudding will be in its eating, and the citizens are getting impatient. Overall, a B+ for acknowledging that macro-stabilization is not victory while insisting that the growth switch will not be turned on by priming the pump one more time.
Aurangzeb was followed by the planning minister who spoke in devspeak, which must have been a delight for development sector specialists. An alphabet soup of acronyms—from the 5E framework to 4RFs, the 13th Five-Year Plan, Vision 2035, Vision 2047, the National Economic Transformation Plan, and the Home-Grown Economic Plan—appear to have (probably) been rebranded under the umbrella of a new strategy document called, Udaan Pakistan.
It is also possible that the finance minister has made clear he has no appetite for the many visions, missions, and strategies, and would instead prefer to restrict himself to a limited but executable agenda. Meanwhile, the Planning Commission can carry on with hiring consultants to prepare strategy papers for digitizing an E-Pakistan. Grade withheld until we have more details.
Then came the antithesis, the deputy PM. True to form, the aging leader sang praises of “bees-tera to bees-satra” and how the country was robbed of its best chance to become a G-20 economy. Comparisons were drawn between Manmohan Singh and Mian Nawaz Sharif, and history litigated, insisting that the former emulated the latter’s reforms. This was, of course, not the time or place for admissions of guilt. And none were forthcoming.
Meanwhile, his talk also laid bare the existential conflict in the philosophies of key members of the economic team. While the finance minister had earlier called fiscal surplus a remarkable achievement and deficit the bane of Pakistan’s economic existence, the deputy PM declared that “since the fiscal deficit is in rupees, it is always manageable.” Feel free to tear your hair out.
Finally, the PM took the podium and gave a speech that was a perfect reflection of the inherent contradictions in his cabinet. On one hand, he channeled the energy of a free marketer by impressively taking the local private sector to task for its lack of imagination and rent-seeking ways, criticizing its inability to crawl out of the import substitution hole (which, by the way, is still a mantra of the Pakistan Business Council, the country’s premier private sector advocacy group). Yet soon after, his state-led capitalist self took over, as he praised his older brother for setting up LNG plants in the public sector that no private sector participant has been able to compete with. He also played roughshod at the SBP governor who too was in the audience, effectively lamenting his institution’s autonomy at what was a very public event with foreign dignitaries and partners in attendance. God only knows what goes on in in-camera meetings.
Final word. The Home-Grown Economic Plan was showcased as the government’s roadmap for structural reforms whose implementation shall lead Pakistan on a path to sustainable growth. Unfortunately, all the event did was make it apparent that key faces of the economic team are not on the same page, let alone for it to be elevated into a Charter of Economy to be endorsed by all political parties.
But that’s fine. Political parties by definition are not supposed to sign on to the same economic agenda, and even cabinet members have a right to disagree with each other. But differences can and should be de-emphasized when the goal is to improve the lives of average Pakistanis.
However, if Prime Minister Shahbaz Sharif is committed to giving Pakistan a real shot at structural reforms, he needs to make a hard choice. The old guard of PML-N – especially the key faces from 2008 to 2018 - is incapable of shaking off its nanny state instincts. By changing the opening batsman at Q- Q-block post-elections, the PM has already signaled his dissatisfaction with Dar’s cowboy manner of dealing with multilateral partners. If he believes that Aurangzeb—and the SBP under Jameel Ahmed—have shown promise with their performance in stabilizing the economy, he must also fully commit himself to their economic strategy of privatization, deregulation, and macroprudential management of public finance and monetary framework. Which, by the way, are fully aligned with the IMF program—a program the PM admits Pakistan desperately needs.
When Miftah Ismail was unceremoniously removed from Finance, Shahbaz Sharif still had a façade—albeit flimsy—of not being fully in control. This time, the entire cabinet is his, with the party supremo kicked upstairs. History may not repeat itself, but it often rhymes. The year 2025—especially around the budget-making months—will mark the PM’s Hafeez Sheikh-Shaukat Tareen moment. If the prime minister wants to be remembered well by history, he must avoid all temptations of raising PML-N’s home-grown version of Shaukat Tareen back from the dead. Let Aurangzeb stay in charge and take the lead. And let him make his own mistakes, rather than blame it on a lack of empowerment later on.
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