It turns out that a ringside seat to a country plummeting into sovereign default – one of the few perks of an editorial position in a leading daily – is not just an instructive and enriching experience, but an amusing one as well. Listen to too many economic experts, for example, and you’d really begin to think that turning the economy around isn’t too hard after all.
When they’re finally done repeating what everybody already knows, that we’re in this mess because we borrowed too much for too long, they tell you that all we need to do is expand the tax net, increase exports, trim the inefficient bureaucracy, attract more foreign investment and we’ll be paying back all the loans, with interest, in no time.
But politicians don’t quite see it that way; otherwise they’d gladly turn on the switch that would get all that done, and more. The opposition - PTI (Pakistan Tehreek e Insaf) these days - is convinced that the only way to save the country is to vote it back into power. Then everything would quickly fall into place, hence its desperation for a snap election. When it bends over backwards for an IMF (International Monetary Fund) program and takes the begging bowl to friendly countries, it is for the people. But when the “imported government” does the same things, and implements the Fund’s harsh conditions, the “looters and plunderers” are stealing from the people.
Imran Khan ordered his party out of the national assembly because nothing could serve the people better. Then he mulled going back there, to “give Shehbaz Sharif sleepless nights”, only to save the country. He also dissolved two provincial assemblies because the ensuing uncertainty and the cost of provincial elections would ultimately benefit a bankrupt Pakistan.
The PDM (Pakistan Democratic Movement) government, on the other hand, believes that everything that is going wrong is only because of PTI. Things were fine till the establishment conspired to disqualify Nawaz Sharif, remove PML-N (Pakistan Muslim League-Nawaz) from power and impose a “selected government” on the people; one that doubled the national debt, wrecked diplomatic relations with important countries and eroded the integrity of the country’s leading institutions. Now Ishaq Dar is forced to compromise the IMF lifeline by burning borrowed dollars to put an artificial floor under the rupee, sprinkle forbidden subsidies and tax cuts over PML-N’s favourite constituencies and reduce Pakistan’s investment rating to junk for the sake of our future.
Meanwhile, most of the 220 million Pakistanis that are not economists or politicians, who face 30-plus percent inflation – which could jump to 70pc or even 100pc in case of default – for no fault of their own, are left wondering who to believe and when their suffering will end. Economists acting like doctors are advising stage-4 cancer patients how to avoid catching a cold? Or self-consumed politicians desperate to grab or hang on to power? Especially since a lot of them are finally beginning to realise that everybody is lying to them.
It’s true that they could wake up to no better surprise than tax and export revenue suddenly jumping, the rupee rebounding and foreign investors making a roaring return to the Pakistani market. But it’s also true that none of that is possible, at least not nearly in time to save the economy. And the only way to delay inevitable default is to pay the price for IMF’s bailout money, which means yet more belt tightening and a lot more taxes for people that never had anything to do with the borrowing binge that created the crisis.
They’re also beginning to see through the deceptions of the politicians. The same crooked bunch has been swarming around the party or personality likely to form the next government, and the pot’s been calling the kettle black for far too long to still wash with the people. They want nothing more than more jobs and less inflation, to live and work in peace and tend to their families like normal human beings, yet they must suffer because politicians and economists can do no better than grope in the dark.
Perhaps it’s best, at least from their point of view, to embrace the truth. To accept that there’s really no way around default and start preparing for it.
Even if a country that must cough up $25-30bn in foreign debt payments in the current fiscal when it has only $4.3bn in reserves can somehow avoid going under this year, what will it do next year, and the year after, especially with politicians at each other’s throats and economists shedding wisdom that might have worked 50 years ago.
The people do not deserve to go through the trauma of default that owes entirely to the excesses of a parasitic elite. But since they have no choice, why suffer extra because of that elite’s divorce from reality?
Copyright Business Recorder, 2023