Archive for October 16th, 2011

Have We Hit Rock Bottom Yet?

By Shahzad Chaudhry for The Express Tribune

Attending conferences and travelling to them are the two most testing tasks these days for most Pakistanis. The airports tend to give you a full low-down as soon as the ‘green’ passport is presented: I am told by authentic sources that in as friendly country as China it takes twice the time to clear immigration for a Pakistani traveller than for someone with any other passport.

Just so that we may place our ‘higher than the Himalayas’ relationship in perspective, I was also informed that there was a daily flight between Delhi and Beijing compared to only two a week between Islamabad and Beijing. The disparity in trade figures between Beijing and Delhi, and Beijing and Islamabad, respectively, are already well-known. Call it anything, size of the economies or economic pragmatism, or whatever, the fact is China and India are unlikely to go to war with a $100 billion stake, keeping the two tied in an interdependent embrace; wish what you may, Pakistan, bosom love ain’t coming to the rescue. That is the new world ‘geconomics’.

One thing that always strengthened my hand as an ambassador for Pakistan during the Shaukat Aziz years was the perpetual good news that came out on the economic front from Pakistan. Now there may be more than one opinion about Musharrafian economy, but I have always held, and with some conviction I might add, that economies work on few sound fundamentals and a lot of good sentiment. This last word is key. So if the services sector — telecom, construction, finance — all seemed to be galloping under Shaukat Aziz’s mantra of economic progress, he perhaps understood well the significance of looking dapper and sounding happy. He held the dollar pegged and the stock market boomed: the first was clever policy, the latter sentiment. After all what is in the story of an ‘Incredible’ India — the incredibility indeed of a well-manufactured fable and from there on the critical mass of success takes on.

It was famously reported that a particular British chancellor of the Exchequer was singing in the bathroom: the veil of pessimism lifted and the economic sentiment began its own hum. But when you sit on a dredged economy and scooped-out resources there is little that you can offer to the world as hope. Words remain just that, words. Give Hafeez Shaikh something to hum about, and he will hum. The difficulty is he himself remains incapable of carving one.

I haven’t heard a sicker pronouncement of Pakistan’s economic predicament than someone quoting to me the likely $12-16 billion flowing in remittances, as the ultimate trigger for turning around our fortunes. There cannot be a darker indictment of our lows. Incapable of generating revenues inside, we hope like hell for the world and the people to resuscitate us from the outside. Even in that, though, madness must have a method. Investments, portfolio or otherwise, flow into congenial environs; some, Hafeez Shaikh will have to conjure, some we, as partners in crime, will have to relent and enable.

I am not an economist, and certainly never pretended to be one, but I have been subjected enough to the pains of a few that even I could venture to suggest a course to the hapless finance minister. For instance, capital flight is a growing reality and industry needs an injection of support and sustenance under a dwindling availability of energy. The approaching winter months may just provide some respite from domestic energy consumption, enabling diversion to the industry sector. Where possible, policy measures can enable relief and sectoral benefits to industries that wish to work through the difficult times. That might just sustain the benefits emerging from an export boost last year.

Many have tended to qualify the boost in different ways and perhaps each has a point but then how long can you keep a merchant down; there is something called “recess fatigue”, and he must break from it to keep the wheels going. One hopes that a finance minister may recognise such trends and then have the wits to turn them into triggers of rebound. If not, paralysis may just be a more enveloping reality in Islamabad.

Agriculture is half policy, half divine. The policy side has seen some attention while divinity is mostly earned. Our erstwhile brothers in East Punjab seem to have hit a good combination and are worth a reflection. So if there is a formula for our finance gurus to follow in the short-term, it must reside around energy, industry and agriculture. Once out of the hole, we can then begin to embellish our societal existence.

What will bring back a smile on the finance minister’s face? An enabling environment? A country in war, and a 10-year-old war at that, cannot be given to economic congeniality. We need to wean this country away from war. Seriously taken, the All Parties Conference urgings to ‘give peace a chance’ is a worthy, if catchy slogan, and must find the necessary politico-military resolve. The difficulty in our prevailing discourse is that few are willing to find solace in a political effort alone. As the refrain is that military runs the policy, perhaps that is where one may head. So then, over to General Kayani.

With two years to go in his tenure, here are a few things that General Kayani must do: get us out of this war — the lesser the pain the better; shun militancy in all its manifestations — and here the word manifestation to my mind carries all its consequences; and cleanse the military system of this ill-advised and ill-conceived baggage of the yore. We need not depend on the augmenting effect of an irregular effort in enhancing our national agenda. For some time let us simply look inside and avoid external diversions. With General Kayani convinced of such disposition, no arm whatever can practice any part of our rather sad legacy in regional ambitions.

I do not know who killed Rabbani and why; I also don’t know if the Pakistani military alone supports the Haqqani network and to what extent, but I do know that defending accusations of Pakistani culpability is becoming a harder task. The time when any such insinuation will stick is when we will have hit rock bottom.

I wish we were out of this predicament. I wish to see my country relevant and respected; and, I wish to see a smile on a humming Hafeez Shaikh.

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