From Pakistan : Politics Must Deliver

Nawaz Sharif has his heart in the right place. He, in his party policy to recover Pakistan from its dismal economic state, has declared a 3Es policy, counting in economy, energy and education as the planks around which he will base his strategy when in power. If there is one more thing that must be suggested to him to complete the survival package it will be governance at all levels that he in the centre, and his chief ministers in the provinces, must pursue. Altogether, this is the survival package for Pakistan. Leave out one, and you are faced with extinction in the long run.
The Pakistan Muslim League (N) (PML-N) chief has chosen the two right pillars to prop a dwindling economy: energy and education. Energy will help keep the industry running and halt the exodus of escaping capital to other countries that offer assured and affordable inputs. Education, when targeted especially, will feed in a knowledgeable and skilled workforce into the economy to sustain it, especially since the economy is sure to change face as nations find their own niche in the global chain.
Growth in an economy is built around three fundamental sectors – commodities, manufacturing and services – that enhance production and add to the gross domestic product (GDP) in an economy. In Pakistan’s case all three will need focus and parallel strategies to boost production. Each though should have an enabling policy assistance that assures continuity and enhances the confidence of an investor to act as a trigger in rebounding economy from its dismal state.
Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) on the other hand has addressed the full domain of the economy while enunciating a programme similar to any Finance Minister’s statement to Parliament. The PTI’s key facets to spur economy will include education, health, governance, revenue generation and institutional reform. In its detailed explanation it has included energy and other imperatives too, but it remains a broad-based policy statement. Perhaps in a dwindling economy all that the PTI says will be important to address, but where lies its focus? That remains an absent imperative.Pakistan’s economic management has tended to revolve around macro-economists mostly. Revenue, expenditure, current accounts and foreign reserves have mostly driven such management, perhaps relevant to the thought process of the finance gurus that have run the ministry.

Growth in an economy is built around three fundamental sectors  commodities, manufacturing and services  that enhance production and add to the gross domestic product (GDP) in an economy. InPakistan’s case all three will need focus and parallel strategies to boost production. Each though should have an enabling policy assistance that assures continuity and enhances the confidence of an investor to act as a trigger in rebounding economy from its dismal state.

Line Ministries such as trade and commerce, water and power, petroleum and natural resources, and agriculture complete the economic mosaic while headed by separate ministers. What has greatly been missing is an integrated, overarching approach of prioritising one over the other without discounting appropriate attention for each, which could help reboot a flagging economy with greater robustness.
There is one example that even a directionless Pakistan Peoples Party (PPP) Government will leave behind that will need to be emulated or bettered, and that is attention to agriculture as a policy. We saw increased commodity prices in this sector that spurred growth, though it did leave some consequent complexities in inflationary trends and needed more lateral linkages to other aspects of the economy before it could be called a comprehensive trigger to rejuvenate a sagging economy. Also, PPP’s innovation in policy began and ended with this one step of raising prices for agriculture products to bolster the farmer. Beyond this single focus on agriculture, the PPP left all else unattended.
Leadership with a clear vision that is integrated and comprehensive, and can offer a triggering strategy to move the economy forward, is of essence here, not merely macro-economic management of some key indicators alone. This can only be done under an economy czar, who must not only be a macro-economic manager but a leader who can orchestrate the line ministries into an integrated team with coherent symphystic objectives to forge a productive momentum in the economy.
For too long this nation has been expending its reserves. Unfortunately, we have remained stagnated even as we have emptied our coffers. In economic terms that is akin to stagflation – printing money to make up for the empty coffers without any growth. Money down the drain. People eating up what is available, without any effort to replace the used assets through growth. If anything, Pakistan’s economy has been a diminishing one in the last five years; the slide must be halted before it is reversed.
Clearly then the state must earn more than what it may spend. That shall have to be the starting point. That includes collecting revenue and clamping on expenditure. Structural reformation, which really means privatisation and reducing Government, is also included. If the state can stop eating out of its reserves till it has the ability to replenish those, a state will remain buoyant.
A buoyant state attracts investment capital, both domestic and foreign. That spurs growth. Indigenous growth is also aided by the three production sectors in commodities, manufacturing and services. Of these, services remains the fastest moving of the three. It will need supportive policies and infrastructure. A combination of an expanding IT and telecommunication sector places Pakistan in a fortuitous position to begin exploiting this capacity. Banking and the trade sectors, as indeed the information and entertainment industry, need to be encouraged to benefit from the IT infrastructure.
Road and rail network developed on build-own-operate-transfer (BOOT) basis can become the source of integration within the country, as indeed in the region while providing for significant number of jobs in the construction sector. Automobiles and rolling stock will boost investment in a privatised sector, permitting free movement of goods and people. Supporting industries will develop when movement of capital, goods and people begins at this level.
It is improbable that an economy can really be robust enough, or produce fast enough, without a vibrant services sector. Integrating with the region for trade and movement of goods and people will also set the services sector to move rapidly and add to growth. Mere claims of a strategic geographic location is only a potential unrealised which is capacity wasted. This potential must be used to deliver its advantage and add to growth; else it is only a claim in the air.
Manufacturing will need energy, while agriculture will need supportive policies to incentivise production. When Pakistan grows at between 7-8 per cent growth rate, energy needs are expected to grow at around 10-12 per cent by historical trends. At the current rate of 3.5-4 per cent growth, electricity needs have grown at around 7-8 per cent annually.
Better and committed hands-on management under the current Secretary Power Nargis Sethi shows what just improvement in governance could do. She is not only recovering outstanding dues, she has put in retributive steps to habitual defaulters till they clear their bills. She has also managed electricity load much more prudently. Cutting down on the pilferages and collecting outstanding dues must be followed with adding to energy production; that is when Governments and diplomats should expend diplomatic and political capital to seek international funding for mega energy projects. The new American administration is a good place to start.
Economy remains Pakistan’s most pressing security concern. It is possible to recover it and move it forward. It will make us a more confident and a more secure nation. It remains a task that politics must deliver.

(The writer is a retired air-Vice Marshal of the Pakistan
Air Force and served as its Deputy Chief of Staff. )


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