The PPP government routinely cites the rise in inward foreign remittances as the (sole) reflection of its 'good' economic policies. The Musharraf regime used to cite 'foreign' investment inflows as its mark of success. Neither regime made a concerted effort to reduce reliance on external resources.
In good times, the Musharraf regime mobilised foreign direct investment, but this policy was vulnerable to fallout from a global recession. Continued pursuit of this vulnerable policy portrays a mercenary attitude - a tendency portrayed by the trade, foreign and defence policies as well, and calls for a change at the earliest.
In economic policies, this mindset was reflected by a tendency for 'copying' the rest without visualising its long-term consequences. Tragically, this was the mindset in most South Asian countries including India. What made it worse was low concern for the quality of foreign inflows ie their volatility.
Excessive reliance on external flows for sustaining economies is fundamentally flawed; it is rendered more risky by a governance profile that erodes investor confidence. No wonder we now confront a scenario wherein foreign inflows have dried up making a default on external debt a real possibility.
The regime gives no indication that it had any idea of what it was inheriting in 2008; it wasn't bothered because it had an agenda that placed national interests at an even lower priority. Had that not been the case, it wouldn't have done what it did in the past three and a half years.
Pak rupee is on the slide and the SBP is not intervening in the market, as it did before when the Rupee-Dollar parity touched Rs 91/$. Rumour has it that this slide will continue because a progressively weaker current account position won't permit support for the rupee.
The regime manifests its total tactlessness when it comes to taking crucial decisions for ensuring a rational distribution of unavoidable price increases. Minimising increases in the prices of items that will directly or indirectly push up inflation is rarely the regime's concern.
The policy of allowing the exchange rate to be determined by demand and supply has its pluses and minuses; while it would certainly discourage non-essential imports, it will increase energy prices, which will push up the CPI because fuel cost is a part of the cost of every good or service.
The regime reflects a bigger deficit of rational thinking than of resources. Each time it enforces a fuel price hike, it overlooks apportioning less of its impact on the fuel that directly impacts the CPI ie high-speed diesel - that drives heavy-duty transport - as compared to petrol.
The impending rise in inflation can only be ignored at a high cost when the regime confronts a multi-faceted threat to its existence. In this scenario, the increase in the wheat buying price from Rs 950 per mound to Rs 1,050 is the surest way of triggering even higher inflation.
Such actions make it difficult for the SBP to pursue a logical monetary policy. In an environment of rising inflation, the expectation that the central bank will cut the bank rate is suicidal because it inflates negative real returns to the savers (rate of inflation minus return on savings).
Any move discouraging domestic savings increases external dependence; in a setting of virtually zero external inflows, it could only worsen the economic scenario and make sovereign default more likely not just on external but on domestic debt as well. What we needed was steady strengthening of the investment environment to encourage Pakistanis - the clan that we keep threatening with dire consequences - to voluntarily bring their black wealth back into Pakistan, now that economic prospects everywhere else grow darker by the day.
With a population of over 180 million, Pakistan is the sort of market that offers a potential for profit higher than in many other developing countries. India, also in distress now for committing the same policy blunders, has opened up even its retail market to foreign investors.
But given the 'great' political and economic genius of the regime that governs Pakistan we can't credibly give such an impression even to Pakistanis. Indeed, Pakistanis who stashed their wealth abroad are guilty, but didn't their 'black' act have a lot to do with the economic and taxation policies in Pakistan?
Can those promising to bring that black wealth back by the force of their muscle actually do so? If history is anything to go by, they can't. Only a totally overhauled taxation system that taxes fairly, and a statement meets its obligations by offering a fair return to the taxpayers in terms of ever-improved services can do so.
None of the politicians, in power or out of it, ever came up with detailed, well-thought out and credible-sounding plans about overhauling the public services sectors to build investors' confidence in the future and create a voluntary desire among Pakistanis to support the state in that endeavour.
This is not an impossible task, but it requires in-depth studies to uncover and trace corruption in every public service, and to undo it, understanding the reasons therefor. This exercise is imperative, but neither the failed politicians nor those holding out big promises bother about undertaking this exercise.
Right now, a race is on for holding the biggest public meeting. How do these meetings serve the cause of cutting state inefficiency, corruption and waste, is a million dollar question because in all these meetings what you hear are impractical promises, nothing else.
Who are we trying to fool? Problems won't disappear; they have to be resolved through rational, equitable and well-thought out investigative and corrective actions that eradicate them. That's what the people want even though they can't express it as precisely. But shouldn't a 'good' politician figure out that demand on his/her own?
How much do our politicians care about the people and the country is exhibited by the fact that failing to fulfil their mandate doesn't embarrass them but quitting voluntarily by gracefully admitting their failure to let another regime do what they couldn't, does enrage them. What a sense of moral responsibility!
Pakistan has enormous potential, and can be turned into a truly progressive state but the top brass must go. What we need is a leadership that takes pride in the success of the country. The system that can neither sustain the economy, nor defend national interests and territorial borders, must change before it collapses and makes us all pay for it.