Analysis: For the economy, the song remains the same

Pakistan's economic problems are old, and the solutions proposed a decade ago are being proposed again.


Khurram Husain April 29, 2011

KARACHI:


There was no pomp and even less ceremony. The political leadership sat in a straight line, mostly impassive, and stared ahead as Pakistan Business Council (PBC) President Asad Umar ran through the two-page brief the council called the National Economic Agenda.


The agenda itself is not new, except in some details. It calls for raising more revenues, phasing out untargeted subsidies, ramping up expenditure on education and targeted social protection measures. It calls for deregulating the power sector to reduce inefficiencies, to fast track the construction of a liquefied natural gas (LNG) terminal to break growing dependence on imported furnace oil and to “rationalise” prices in the energy sector, a technical euphemism for raising prices.

PBC is not the first group to have rendered this sort of advice, nor will it be the last. At the end of the day, Pakistan’s economic difficulties are of a very bread and butter variety compared with many other countries, we are not faced with the complexities of arranging a large-scale bailout of our financial sector for instance, nor are we caught up in a dense web of a regionally integrated economy like those of the European Union.

Our difficulties have cookie-cutter solutions. Ten years ago, we were struggling with issues such as broadening the tax base, bridging a stubborn budget deficit and arranging inflows of foreign exchange to keep our balance of payments afloat. Ten years ago we were banging the doors of the IMF; mission after mission came and went without agreeing to release the next tranche.

The problems are old, and so are the solutions. The tools with which to solve our problems, the people to implement them – all are present. Nothing in the two-page set of recommendations made by the PBC call for new legislation, or the creation of new institutions, for instance, a deposit insurance corporation. Instead, they call for amalgamation of existing institutions, such as the merger of the ministries of petroleum and water and power into an “energy ministry”, an old proposal incidentally.

In fact, the striking thing about PBC’s recommendations is how straightforward they really are.  So where exactly is the problem? The problem is all in the optics, in how we perceive our country and its institutions and its problems. The problem is lack of clarity in our national conversation, our public discourse about the country’s real issues. The problem is the infantile tendency to politicise everything, to see everything – from the war to the economy – as tools in a political contest.

Until the optics surrounding the crisis are brought under some control, the voice of reason can speak all it wants – it will never be heard.  What the PBC agenda needs to be accompanied by is an engagement strategy, an engagement with our political system, and an engagement with our public discourse.  Friday’s event opened one of these engagements with the political parties.

Now comes the hard part. The politicians cannot be separated from the media, from the public discourse. They are always playing to the gallery. To change their behaviour, change the discursive landscape they’re looking at. To do that, you have got to have a story to tell the people, and tell the story loudly, clearly, repeatedly. What exactly is the story PBC wants to tell? In days to come, we will find out.



Published in The Express Tribune, April 30th, 2011.

COMMENTS (3)

Meekal Ahmed | 10 years ago | Reply Let us applaud the initiative of the PBC. I don't know if this has happened before where the captains of industry have come forward. We know what needs to be done and how. We also know why it has not been done. 'Ten years ago and mission after IMF mission came and went without releasing the next tranch'? Excuse me? I don't know of any such missions. Only the present one. And I support them fully. If you are not prepared to do the things you need to do then there should be no tranche for the next ten years.
Hedgefunder | 10 years ago | Reply Well written piece, but sadly there are not too many solutions offered, and those that have been mentioned are either not realistic, or politically viable!! Hence the story of this Nation!! What is worrying is what is going to happen in next 12 months, as I can not see International Lenders playing ball with all the BS, about reforms that they have been sold in the past, so who is going to bail out the Nation then???
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