Economic performance!

Foreign economists/analysts have long been regarded as much more credible compared to their domestic counterparts and while tall claims of formulating in-house domestic economic policies by finance ministers, economists or non-economists, past and present, are almost routine yet local analysts are dismissed as, at best, 'partisan' and, at worst, as those with neither the skills nor the wherewithal to undertake an analysis of the state of the economy in a meaningful manner.
The most recent article quoted by the Press Information Department is from Forbes, a well-known American magazine. It was written not by a Forbes staff reporter but by a contributor, Daniel Runde, who states that he spent time in Pakistan 'listening to a wide-range of perspectives' though how wide-ranging these perspectives were, is not mentioned. Having said this Runde's two major conclusions are not in dispute. In his own words "what has not sunk into international perceptions about the country is the tangible consensus among government, military, and Pakistani citizens against violent terrorists including the Pakistani Taliban and the alphabet soup of other terrorist groups in and around the country. Pakistan will continue to experience attacks by fringe groups, but policymakers and investors need to stop operating as if the Pakistani Taliban is at Islamabad's doorstep." And secondly "Chinese investment is another reason why the United States should 'reassess' its Pakistan calculus. Since Xi Jinping first announced the $46 billion China-Pakistan Economic Corridor (CPEC) in 2014, the project has quickly become the centerpiece of diplomatic relations between the two countries. CPEC will include highways, railways, and oil and gas pipelines - all constructed via Chinese companies".
I however strongly disagree with his third contention. He maintains that: "Prime Minister Nawaz Sharif is governing with a competent cabinet, a majority coalition, and is working in tandem with the military to deliver peace and security. Sharif was elected in Pakistan's transition of power between democratically elected governments in April 2013 and so far, he has demonstrated enough of a commitment to democracy." Even a smidgeon of a commitment to democracy, and its inseparable twin accountability, would have led to some progress in the passage of the Opposition's bill on the Panama Papers in parliament as well as the start of an investigation by national institutions like FBR and NAB. To maintain that the Supreme Court will judge the case initiated after all else failed to motivate the government to initiate appropriate measures is ludicrous as it absolves parliament and the relevant institutions, now headed by loyalists, from undertaking their responsibility.
A competent cabinet indeed! I would just comment on the performance of a few of the federal ministers. Nawaz Sharif's right hand man, his Finance Minister, has increased external borrowing to unsustainable levels (including issuing Eurobonds and sukuk at rates well above the global rates) to shore up foreign exchange reserves; by manipulating the rupee value he has contributed to making our exports uncompetitive leading to a steady decline in exports, and his tax measures continue to rely on the poor and middle income earners for revenue and I am referring to the inordinate emphasis on indirect taxes including the hefty tax on mobiles as well as making those who are exempted from filing tax returns, for example housewives, pensioners and those resident abroad, to pay tax as non filers. To point out that these categories can request refunds is ludicrous as even if these individuals are aware that they can get a refund and have the wherewithal to file the claim to boot, FBR has a history of inordinate delays in refund payment. And last but not least Dar has allocated an appallingly small amount to CPEC projects, considered a game changer, 130 billion rupees in the current year, which would considerably slow down their implementation.
Dar constantly cites a buoyant stock market as a major achievement. I would like to draw the attention of the readers to the fact that Pakistani finance ministers in recent history have all used the stock market buoyancy as an indicator that they are embarked on the right path particularly during days when they are under intense criticism. Tax collections from the stock market, however, are appallingly low - 5 billion rupees in 2015-16 while the potential is estimated at 100 billion rupees.
The Minister for Water and Power has been unable to improve the management of the power sector leading to a rise in the crippling circular debt. The focus remains on enhanced generation and ignored is the improvement in the transmission network that so far can only transmit 1650 MW. And recently the Secretary Petroleum and Natural Resources as well as Pakistan State Oil (PSO) requested the Prime Minister to direct Ishaq Dar to release 175 billion rupee supplementary budget to clear power sector dues and enable PSO to open letters of credit to import fuel or else face a significant increase in unscheduled load shedding.
Transparency a hallmark of democracy was and continues to be compromised by the Minister of Petroleum and Natural Resources who repeatedly informs Business Recorder that he has directed that the Qatargas deal (for 15 years) signed in February 2016 be put on the web and if PSO, under his administrative control, does not heed his instructions then there is nothing he can do about it. In addition all regulatory bodies that were challenging the Cabinet/relevant Ministry's recommendations in the public interest, including PPRA, Nepra and Ogra have, through a notification, been brought under the control of the Ministry.
Minister of Commerce has made several foreign tours seeking better trade deals but with exports continuing to decline, even though the main responsibility for this falls on the Finance Minister, one cannot laud his performance.
It is unclear what has been the contribution of the Minister for Production/Industries or head of Board of Investment and Privatisation Commission, other than defending the Prime Minister and his family on the media, as foreign direct investment is declining and this in spite of CPEC while privatisation is at a standstill.
Runde finally adds that "For much of last year, Sharif exercised restraint against an active opposition that led a crippling 162-day sit-in in front of the National Assembly to contest the 2013 election results. Instead of opting for an aggressive approach, Sharif wisely deferred to an independent election mission to verify the results, which recently ruled in favour of his party." I would assume that not even the PML-N stalwarts would privately agree with this assessment; and ECP is certainly not independent of the ruling party especially given that the courts challenged the ECP decisions.
Runde's final words are extremely credible: "China's bet on Pakistan could overshadow the US contributions unless we rethink our mix of engagement... The good news is that Pakistani businesses still prefer the allure of technology transfer and innovation offered by the US companies. But make no mistake: for Pakistanis, Chinese investment is better than no investment." Indeed.
The Sharif administration in general and Federal Finance Minister Ishaq Dar in particular has exhibited the tendency to cite only favourable foreign articles - articles that are few and far between. I simply cannot restrain myself from mentioning once again the award of the best Finance Minister of South Asia conferred on Ishaq Dar by Emerging Markets this year with the same edition carrying a significant number of advertisements from our state-owned banks and enterprises - a magazine whose readership is limited to those few hundred who attend annual meetings of multilaterals. Thus the linkage between advertisement support and foreign favourable articles cannot be dismissed.
Citing multilateral staff is also not appropriate as it is not in their mandate to publicly criticise the borrowing country - especially a heavy borrower like the Sharif administration.
To conclude, dismissing all domestic criticism as partisan or by incompetents is perhaps considered politically astute given the scale of criticism post-Panama Papers and with respect to the flawed economic policies based on flawed data; however such an approach disables the ruling party from making a convincing pitch to the general public in general elections as opposed to bye elections when the ruling party is favoured. Zardari-led PPP too made the mistake of dismissing survey results and subsequent analysis on the chances of PPP's reelection bid in 2013, a mistake that is likely to be repeated if Zardari's speech on Benazir Bhutto's ninth death anniversary is anything to go by, but surely Nawaz Sharif is more in touch with reality!