Davos yet again!

Prime Minister Nawaz Sharif's trip to Davos Switzerland to attend the annual World Economic Forum (WEF) was hailed as a success not only repeatedly by himself, a natural enough bias, but also by devoted members of his cabinet; the official news agency was used as the medium to substantiate the claim of success every single day that he was at the moot.
Upon the Prime Minister's arrival in Switzerland on Monday 16 January 2017, the official news agency issued a curtain raiser stating that "Prime Minister Muhammad Nawaz Sharif would apprise the world leaders and top investors of the success of Pakistan's economic policies and the remarkable turnaround that has amazed the global financial institutions." The next day the Prime Minister in a chat to reporters the majority of who he transported at the taxpayers' expense, reiterated this litany that was initiated and has thenceforth been constantly fuelled by his Finance Minister Ishaq Dar who bases his claims almost exclusively on arguably doctored data, a handful of favourable news reports in foreign journals, the buoyant stock market and our improved rating by agencies.
Independent local economists dismiss these claims. With respect to data manipulation they point out - with irrefutable proof that highlights the failure of the government to rationalise data from multiple official and industry sources - has been made possible because the Pakistan Bureau of Statistics (PBS) is under the Finance Ministry's administrative control. The select few foreign journals as well as multilaterals/bilaterals rely on government data and take it at face value. Ishaq Dar continues to ignore calls for an interaction between the PBS staff and the media. Be that as it may, by and large, notwithstanding a few favourable reports premised on the doctored growth rate the focus of the foreign media/multilaterals with respect to Pakistan has remained on "terrorism" and "do more".
Pakistani stock market, one of the most under-taxed sector, has been manipulated by successive finance ministers to show buoyancy when the finance minister of the day is under severe criticism. And our improved rating by foreign rating agencies cited to reflect the country's improved economic performance ignores the most salient component of the improved rating: our capacity to repay loans. Pakistan has not defaulted on its loans to-date but at present with rising reliance on borrowing from the external commercial banking sector which the past two previous governments did not engage in - at high rates with a very short period for repayment - a net outflow was evident by December 2016. This implies greater onus on raising exports (which continue to decline) and remittances (whose rate of growth has slowed down and is forecast to decline in months to come as the oil producing nations are in recession). Dar has massively raised external borrowing - from $51.3 billion on 31st March 2013 to $62.3 billion in September 2016 - a 21.4 percent increase while domestic borrowing was Rs 8.8 trillion in March 2013 and rose to Rs 14.64 trillion in three years and five months - a rise of 66 percent. Cleary he is borrowing to fund the current expenditure (78.5 percent) rather than development expenditure.
The Prime Minister restated on the first full day in Switzerland - 17th January - that he had come to attend the Forum "to share the remarkable economic turnaround of Pakistan that only a few years back was on the verge of an economic collapse and the entire global financial community was acknowledging this positive change". Two obvious observations are in order. First, he was not offered to be a plenary speaker, nor to head a seminar, nor to be a participant in any seminar - (former chief of army staff Raheel Sharif was a discussant in five seminars out of which three were publicised during the Forum and two were held under Chatham House rules) - fora that would have been more widely reported by the international media. Thus Nawaz Sharif's chat with reporters was limited to reporters whose audience is Pakistani - an audience that has been bombarded with tall inexplicable claims for the past three and a half years.
Secondly, FDI goes not to destinations where the chief executive/Prime Minister and his loyalists claim success but on ground realities that are gleaned from more credible sources including what is appearing in the domestic media. Thus a foreign investor would have read reports on massive data manipulation, on the overvalued rupee, on the issues facing local investors relating to a tax system that is inequitable and anomalous, applying different rates on different investors with at present China Pakistan Economic Corridor projects largely exempt leading to different costs of production, exit of several local manufacturing firms to Bangladesh and massive capital flight, not to forget that the bulk of the First Family's fortunes are banked abroad. Perhaps Ishaq Dar should begin to heed local economists as well as the local media. However, as the Prime Minister remained surrounded by loyalists at Davos, as back at home, no untoward questions were raised.
In the third tenure of the Sharif administration, it is relevant to cite two recent examples where the official media, drawing salaries from the taxpayers' money, embarrassed the country and, unfortunately, as no heads rolled, one is compelled to conclude that the instructions came from on high. The first blunder relates to the statement attributed to the then President-elect Donald Trump praising Pakistan's achievements during Nawaz Sharif's tenure - a falsehood that was publicly noted by the Trump transition team; and second the report that the BBC has initiated an 'internal investigation' against the reporter who published a story on Park Lane flats owned by the sons of Prime Minister Nawaz Sharif for "misusing the platform of BBC". This was denied by the BBC.
On 18th January, Wednesday, the Prime Minister attended a dinner given by Abraaj Group and met business leaders - a dinner that prompted the official news agency to file three separate reports the same day as well as one the day after. Abraaj Group, it may be recalled, is exiting Pakistan and is engaged in the sale of its shares in K-Electric to a Chinese company. The company has also repatriated billions of rupees to its headquarters in the UAE. According to someone who attended the function there were 70 people at the dinner - 20 were from the PM's delegation, 20 from Abraaj Group, 20 Pakistani industrialists resident in Pakistan and there were only 15 foreigners. Three senior executives from three different multinationals were reported by the official media and included McKinsey and Company (handles shipping cargo), Citibank (operations limited to large transactions like L/Cs and remittances) and Unilever (sale of consumer items including foods and shampoos, etc).
The bilateral meetings held on the 18th and 19th were between the Prime Minister and an impressive range of heads of international companies who all extolled the economic performance during his third tenure. The companies included: Procter and Gamble, head of Swiss Asian Chamber of Commerce, Swiss Global Enterprise and Swiss Business Council, Tadashi Maeda, Chief Executive Officer, Executive Managing Director, Japan Bank for International Co-operation, Tokyo, Japan, Ms. Ilele Gordon, Chief Executive Officer & Chairman, Ingredion Incorporated, USA, Levent Cakiroglu, Chief Executive Officer, Koc Holding, Turkey, Sigve Brekke, President & Chief Executive Officer, Telenor Group, Norway, Ms. Wang Ling, Executive Vice President, Nestle, Ms. Petra Lox, Head Public Affairs, Novartis AG, Switzerland, Martyn Parker, Chairman, Global Partnerships, Swiss Re Management Ltd United Kingdom, Western Europe, Bill Gates, and Jack Ma of the Alibaba Group. There was no independent media's confirmation of what was discussed in these meetings and, some sceptics, even challenge whether they were held at all. In any case, one would have to wait and see if these meetings attract FDI in months or years to come.
On 19th January Prime Minister departed for London and reportedly resided in the Mayfair flats. A successful trip indeed!!??