'Competent cabinet'

During the past three months, Pakistan's minor rating/perception upgrades by Moody's, S&P, and Bloomberg were repeatedly cited by the finance minister as signs of Pakistan's progress. Now the Forbes magazine too has joined this optimistic lot. Great, but is that enough? Do the ground realities confirm what these agencies claim? That's the issue that requires an honest reflection.
In his article titled "Pakistan: The Next Colombia Success Story?" published in the Forbes magazine, its author Daniel Runde complimented Prime Minister Nawaz Sharif for governing the state with a "competent cabinet", a majority coalition, and for working in tandem with the military to deliver peace and security. The first part that sounds odd is "competent cabinet".
Just two instances of the cabinet's "competence" are the crippling crisis in the power sector and the continued high fuel prices despite almost a 60 percent reduction in global oil prices - distortions that account for a slide in economic growth, especially in exports, let alone expansion of import substitution sectors which is necessary for pulling Pakistan out of the external debt trap.
The "competent cabinet" isn't bothered about two other distortions: flight of capital fuelled by Pakistani newspapers that keep publishing full-page advertisements inducing investment in real estate abroad, and restructuring the state-owned entities that are bleeding the economy. How the PSML and PIA are being prepared for their "promised" privatisation is no secret.
Next, the fact that the Army had to step in to deliver not 'just peace and security' but justice as well (via military courts that now have 2-year constitutional cover for their proceedings) reflects governance failure because of the thus far denied inability of the civil law enforcers and the lower judiciary to catch and swiftly try terrorists that were thriving under this weak (and collusive?) setup.
Requiring the armed forces to take over this burden at a time when, on the Western borders they are heavily involved in the operation Zarb-e-Azb, and on the North Eastern borders, are virtually every day being challenged by the Indian forces while the PML-N remains focused on self-serving 'politicking', can hardly be viewed as the fruits of good governance.
The 2-year constitutional cover for proceedings in the military courts implies that during this period the PML-N regime will take all steps necessary for ensuring that civil law enforcers and the lower judiciary realize their obligations and acquire the abilities and capacities to swiftly try and punish terrorists. But there are no signs yet that this will happen.
According to Daniel, Prime Minister Nawaz Sharif demonstrated sufficient commitment to democracy (or to PML-N's survival?) by exercising restraint against an active opposition that led a crippling 126-day sit-in before the National Assembly to challenge the results of the 2013 elections, and his request to the Army to 'encourage' these crowds to disperse peacefully.
To Daniel, "Western headlines on Pakistan today [shouldn't just] gloss over the progress on the security front, increased political stability, and incremental progress on the economic front" and went on to add that "getting American relationship right with Pakistan will require deeper thinking and action on issues around trade, investment, education, and broader economic development."
Undoubtedly, (courtesy the armed forces) security scenario has improved significantly. But that's only a good beginning. The need for a robust security environment would become even more critical in the coming months as large numbers of expatriate workers and technical experts arrive in Pakistan under the China-Pakistan Economic Corridor project.
According to a recent survey conducted by the Overseas Investors Chamber of Commerce and Industry, poor security and law and order were the major factors that negatively impacted Pakistan's economy, as reflected by a drastic fall in FDI inflow, increase in cost of doing business due large outlays on security-related issues and, above all, the brain drain caused by this setting.
Political stability - essential for building the economy's global image - remains a far cry unless, according to Daniel's logic, having a majority in the parliament alone manifests it. There are deep-rooted divisions that place PML-N at a cross-roads with PTI and MQM, besides the confrontation that PML-N is fuelling between these parties. Together, aren't they threats to political stability?
The military's decision not to use force against supporters of PTI and PAT protesting over the controversial results of the 2013 general elections suggests far more than the fact that Pakistan could be on its way to further "consolidating its democracy". It also implies that the multifaceted chaos created by the political parties is too tough a challenge to be confronted in totality.
While this nation - and economy - damaging confrontation goes on, the more serious diseases afflicting Pakistan are corruption and mal-governance. Sadly, uprooting them too has now been passed on to the already over-burdened armed forces. This worrisome mix hardly justifies admiring the Prime Minister's "competent cabinet" that is administering the state. Corruption in state offices - an ongoing tragedy that doesn't seem to bother Moody's, S&P, Bloomberg, Forbes, the IMF and the WB - can hardly inspire badly needed growth in real investment. While Daniel wants US policymakers and businesses to "look at Pakistan beyond the security lens", can the ongoing slide in domestic investment inspire foreign investment inflows?
Investors consider investing abroad based on their view of a country's growth potential, low security risk, reliable power supply, availability of either raw materials or skilled manpower and, above all, corruption-free administration and business regulation. Good governance in today's Pakistan implies taking all steps imperative for its positive assessment on these counts.
As of now, mega scams in state offices are being exposed. Remember the "mega" scams' list recently released by NAB. While that's a good beginning, but until stolen national wealth (bulk of it stashed away abroad) is retrieved and the culprits given exemplary punishments, it would be overoptimistic to assume that potential investors are convinced that the administration has been cleansed.
By punishing two Generals (hopefully, as the beginning), the Army has set an example that must be followed by similar treatment of the bureaucrats and politicians involved in huge (now exposed) scams in state offices. But the reaction of the Chief Minister Sindh to Rangers-assisted FIA raids on state offices to collect evidence of corruption (calling it 'invasion' by the federation) is shocking.
Poor, often biased, regulation of the economy and corruption in state offices - result of politicising the bureaucracy - have tarnished Pakistan's image for decades. These distortions must be removed to let Pakistan benefit from the enormous potential its economy offers. The fact that Pakistan survived for decades despite its gross mismanagement, proves that. It is high time we undid these distortions because the time for complacency is over.