The new Pakistan Muslim League-Nawaz (PML-N)-led government has taken charge on a weak footing. It is a coalition of close to a dozen political parties who had been and most likely would be fighting against each other in the next election cycle.
These parties have conflicting interests; they had converged only to oust Pakistan Tehreek-e-Insaf (PTI)-led coalition government. They didn’t have appreciation of gravity of economic and energy crises facing the country. And now it’s just firefighting. Bring the International Monetary Fund (IMF) back on the track, get dollars from friendly countries and ensure energy supplies. The situation was not much different in the IK term, but there was some continuity. Now that is missing too.
The key portfolios are energy and finance. The question is who are the real czars calling the shots in these ministries. In finance, Miftah Ismail is the finance minister. But people close to power corridors insist that Ishaq Dar has a strong say in virtually every decision made. There are conflicting views of Miftah and Dar in terms of managing economy.
Dar wants his old formula of a strong PKR with full control on State Bank of Pakistan (SBP) and commerce. Miftah’s thinking is more tilted towards economic liberalization. Then Dr Aisha Pasha is handpicked by the PM. She had served as finance minister in Punjab in Shehbaz Sharif’s (SS’s) tenure. And the decisions made by SS might depend upon her thinking.
Then there are IMF’s conditions and prescribed policies which are politically difficult to adopt. Every decision needs to pass through cabinet and here the members are from a number of parties who are not willing to take tough decisions.
There is no clarity on the decisions. For example, the government is not sure about whether to continue with the SBP Governor Dr Reza Baqir. His term is ending on 4th May. At the time of writing, ministry of finance has made two summaries for the PM – one is to give Reza the second term while the other has three names through which a new Governor may be selected.
The modus operandi of PML-N is to have their confidants in key positions. Qualifications and competence are secondary. In the previous term of PML-N, the key reason for hiring Securities and Exchange Commission of Pakistan (SECP) chairman and SBP deputy Governor (lately moved to National Bank of Pakistan) were being close friends and trustworthy of the then finance minister Dar.
Even now with pressures from different circles to continue with Dr Reza at SBP, top guns in PML-N are saying that he may be competent and instrumental in dealing with the IMF, but he is not our guy. Sirs, rely on professionals. That is what is supposed to happen. Just do it.
In case of energy, the mess is even bigger, and dealing is even worse. The government took a little longer to decide on the energy team. And that is comprising of five people. Shahid Khaqan Abbasi (SKA) is to be heading the energy task force while Khurram Dastgir and another chap are in the power ministry while Musadik Malik is to take care of petroleum. There is no one energy minister. SKA was supposed to be the one.
He is a capable person. But he is playing from behind. Some say that he doesn’t want to have portfolio as once he was the PM and would not like demotion. Others speculate that he thinks that PM may not agree with his strategy, so he is not taking the portfolio. Another theory is that bureaucrats are not at all ready to take any decision as they fear NAB and other accountability bodies. And seeing that SKA is not playing on the front foot. Whatever, the case is, there are too many cooks to handle the broth which is already spoiling.
Then an Economic Advisory Council has been constituted with twenty odd members in it. It’s the same billionaire club (with some change in names due to political affiliation) and a handful of economists and others. There was fatigue from task forces in PTI’s time, and now a similar pattern is being followed by the new government. How can a council with so many members be of any meaningful use? The country needs focused decision making.
And then the PM wants the country to run at his desired speed which he used to have in Punjab. The country is going through an energy and economic crisis. Fiscal austerity and energy conservation are the need of the hour.
At one point, the PM desires to end load-shedding, and at the same time the government is reluctant to pass the higher energy cost pm to consumers. Fiscal deficit is already reaching an alarming level, and without passing the prices on to consumers, the situation shall get even worse. Then the focus is on procuring expensive imported fuel to run virtually all the power plants and counter the growing energy demand due to ongoing heat wave. But the current account (C/A) is a big worry. Country’s reserves are already dwindling and expensive imports of fuel shall add further strain.
Focus and clarity are required. Unfortunately, however, the key decisions are pending because of political exigencies. Let’s hope the newly formed government will settle soon and work on weathering the economic storm as economic exigency is likely to oblige the government to act without any further loss of time.
Copyright Business Recorder, 2022