Independent Economists tell us situation is dire. The government tells us we are well on our way. Economists do not see an early possibility of growth if current policy direction persists. The government insists stabilization now secured we are ready to take off.
Between these two incompatible stances stand the international organizations, straddling the murky line between government's confidence and the Economists' circumspection. They are ambivalent: noting the encouraging early successes but not ready to declare victory.
Looked whichever way, we remain under clouds of uncertainty - more time and more reforms before good times kick in. And uncertainty is the Economy's worst enemy. Data, backed with anecdotal evidence, suggests investors are not buying government's optimism. They do not see the clouds parting any time soon.
Economy is not everything but it is almost everything. It is a threat multiplier. It feeds into national security and sovereignty; into law and order; into public welfare - jobs, cost of living, health and education. A zombie economy, forever dependent on bail-outs, crushes hope.
Government's narrative has so far been vacuous, tall on promise but short on performance. It has also been pugilistic, with open season on the opposition - and civility. This poorly thought out narrative has hurt the government in two ways: the promise - performance gap has robbed it of credibility; and its divisiveness has opened up too many fronts for it to stay focused.
Still, all is not lost. PTI's support base may not be the same as it was eighteen months ago but it is not quite the day of reckoning yet. It can pick up the pieces if it overhauls its narrative; a narrative that is less venomous and more truthful, that recognizes the pitfalls of governance and seeks to bring the nation together.
Perhaps, the following address to the nation could contour the bold new narrative.
"When we formed the government eighteen months ago we discovered we had a crisis situation on our hands. We didn't have enough money to run the government and the foreign exchange reserves were too low to finance essential imports.
Yes, we were underprepared. We did not devote the time we had to develop concrete plans to underpin our lofty goals. Nor did we fully realize the limitations of resources and institutional capacity. We were raw and it showed.
Our first task was to stave off what can only be termed as the threat of insolvency. We quickly moved to cut expenses wherever we could and looked for assistance from all over.
It wasn't easy for me to go beseeching for funds from others. When not in government I ridiculed others who had stooped low and promised I will not do the same. When the rubber met the road I had to eat my words.
But the help we got was not enough. We thought long and hard about the IMF option, fully mindful of its costs. It was a rude awakening but we had to accept our choice limitations.
There were also the ominous clouds of FATF to contend with. Getting black-listed was too frightening a risk.
Between IMF and FATF we were forced to cede substantial policy space.
The positives of the IMF programme have been fiscal consolidation and a build-up of foreign exchange reserves. Both are crucially necessary; in both we have yet to reach 'comfort level'. The foundation is still shaky, vulnerable to exogenous shocks.
These positives, ephemeral to some, exacted political costs. We are painfully conscious of what the burden of high inflation, slow growth, and lost jobs is doing to people, especially the more vulnerable. But what choices did we have?
Taxation reforms have meant high adjustment pains. Documentation drive challenges the informal sector, the safety-net of the unemployed. Current account deficit has shown a remarkable reduction - due to import contraction, not export growth - but has contributed to inflation and stalled economic activity. We have also had to rack up more debt.
Critics are quick to point out the costs of reforms but offer few alternatives. Wouldn't they want exchange regime to be market-based? Can we have low interest rates when faced with high inflation and external sector vulnerabilities? Shall we not roll back subsidies, especially the untargeted ones? Is a serious revenue effort avoidable?
They talk about speed and sequencing. Trust me we have endeavoured that to the extent possible.
Of course we have made mistakes. But handling the economy is not one of them. The real mistake has been our failure to communicate. We should have taken people into confidence, been more open and forthcoming with our option- analysis, costs of the options we chose, and the duration of pain.
Openness would not have made the suffering go away but it would have brought the nation together, as happens in times of war or natural calamities. It would have strengthened our collective resolve to face with grit the harsh reality of a possible economic meltdown; to pay a short-term price for our long-term well-being.
We have been too busy fire-fighting to give good governance the priority it clearly deserves. We have also been bogged down by internecine political battles, where there are no winners; only national cohesion the loser.
Some critics think we have an agenda overload, wanting to do too much too quickly. This may be true but is there anything in our agenda that we can jettison?
I accept we did not prioritize our agenda; to bring it in consonance with available resources, both financial and institutional. This I propose to correct now.
During this year our priorities will be institutional rejuvenation, more efficacious social protection, fighting inflation, and taking the first baby-steps towards sustainable economic growth - not by compromising macroeconomic stability, but through better governance, deregulation, and policy predictability.
To undergird these challenging priorities I will reach out to all political forces. Not just to reduce political temperatures; but to actively seek their constructive participation in the shared objective of nation building.
The pains of economic adjustment will last longer than we visualized. We will do our best to mitigate and alleviate but it will be unrealistic to expect too quick a turnaround.
Despondency is a sin; failure not an option. We can do it. Let's do it together-with unity, faith, and discipline."
Will we ever hear this speech?
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