A dismal outlook for 2012

Published: December 28, 2011

The writer is the executive director of the independent Centre for Research and Security Studies, and a fellow of the International House of Japan/Japan Foundation, Tokyo

The latest State Bank of Pakistan (SBP) annual report highlights Pakistan’s institutional weakness at all tiers of the government — judiciary, civil services, law enforcers, regulatory bodies and accountability agencies — all of these are directly responsible for poor economic growth in the country.

The report, released on December 19, also expresses multiple concerns surrounding the economy, attributing the institutional weakness to the extremely poor governance indicators and to the deteriorated business environment. This way, says the report, Pakistan performed the poorest of all South Asian neighbours.

According to the Doing Business 2011 – Making a Difference for Entrepreneurs survey carried out by the World Bank and the International Finance Corporation, Pakistan dropped eight places in the list of the best countries for doing business, slipping from 75 in 2010 to 83 in 2011.

The SBP reports also draws on the survey to underscore the need for drastic measures to fix some of the most pressing problems that Pakistan faces.

“Both domestic and global factors are responsible, but we believe that domestic issues are more decisive and chronic. These include the collapse of fixed investment, acute energy shortages, urban violence and lawlessness, poor physical infrastructure and institutional fragility,” observes the report.

It also points to the loss-making public sector enterprises which “continue to haemorrhage and drain scarce fiscal resources. Railways, PIA and Pakistan Steel are classic examples of the heavy cost of poor governance to the economy”. It adds that “Pakistan’s political leadership must take credible steps to stop the slide”. But who listens to the State Bank and who is interested in stemming the slide?

Why would dual nationality-holders be committed to the interests of Pakistan or its hapless people? If they were, there would most probably be: a) No rental power plants; b) the Tethyan Copper Company, involved in Reko Diq project, wouldn’t face cancellation of its mining and processing licence and forced to go for arbitration; c) no shadow ministers and heads of government entities cutting shady deals; d) far less load-shedding; e) far greater and serious attention would be on streamlining internal security mechanisms rather than obstructing the traffic of goods and people through concrete barriers; f) better management through professionals rather than cronies; g) people-focused policies to protect them from the food and oil cartels that have contributed to the crushing inflation; h) and no compromises with religio-political bigots who are responsible for much of Pakistan’s political isolation and infamy across the globe.

Alarmingly, the forecast for 2012 is not encouraging at all. The balance of payments has never been worse. International oil prices are likely to soar beyond $100 per barrel. Debt servicing, according to estimates placed before the National Assembly recently, will cross a whopping $4.2 bn, with no hope of a substantial cut in the defence and internal security budget that currently stands above $9 bn.

Tens of millions of Pakistan’s poor will be the direct victims of this crisis, which will not end until the ruling elite puts an end to squabbling for personal gains. It will only aggravate the country’s socio-political adversity if it continues courting religio-political alliances such as the MMA, which has little concern for the common man.

Pakistan’s mighty military establishment has interfered in the political process. It must not do so anymore. Nor must politicians act like vultures who are slicing away whatever is left of the land called Pakistan.

Published in The Express Tribune, December 29th, 2011.

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Reader Comments (6)

  • Londoner
    Dec 29, 2011 - 12:37AM

    Writer — can you please explain your paragraph regarding dual nationals? Are you suggesting that all those issues that you mentioned, including compromising with religio-political bigots, giving cronies good positions, etc are created by dual nationals? If so, can you please name the names of these dual nationals that are responsible for these things you allege? I think you are trying to confuse people and although there may be a few dual nationals who have harmed Pakistan, overwhelmingly it is the single-national Pakistanis who are responsible for these detrimental decisions. Was Musharraf a dual national? Are the judges who let out Mukhtaran Mai dual nationals? Are the judges who free terrorists dual nationals? Are those who equipped Lal Masjid with arms dual nationals? It is convenient to find scapegoats; far more difficult to analyse dispassionately.

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  • Harry Stone
    Dec 29, 2011 - 12:59AM

    A reasonable assessment of the new year

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  • Usman Shahid
    Dec 29, 2011 - 3:01AM

    Finally an article which is not bashing imran khan,
    By the way nice article on current bad situation :(

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  • Max
    Dec 29, 2011 - 7:56AM

    Your last paragraph sums it all up. The economic turn-down, the deinstitutionalization of governmental structures, inability of autonomous bodies to function as viable institutions. Is there anything that is working?
    The scenario appears to be very bleak for 2012. Is there anyway out? My brain melts down when I think of growing economic, political, and social crises in Pakistan.

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  • meekal ahmed
    Dec 29, 2011 - 4:58PM

    The SBP report is backward-looking. It should have a stronger focus on the period ahead and at least offer projections over the next three years.

    Unlikely to be a pretty one but they need to point to the looming risks.

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  • awais
    Dec 31, 2011 - 12:28AM

    i don’t understand really get where this attack on dual-national’s came from. i grew up in pakistan and though a dual-national, thats where my heart belongs and thats the country i’ve always dreamt of going back to better. now with this limit on dual nationals running for parliament and people like this author’s unsubstantiated attacks on my kind, i’m beginning to see where i’m welcome.

    you can keep your single nationals zardari, nawaz sharif, zehri, your feudal lords and we’ll keep our money away from pakistan.

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