Khanate takes shape

Pakistan's threshold of pain is about to be tested

You don’t sit easy on the Iron Throne.

Ask Junejo. Chucked out. Ask Nawaz. Ousted, overthrown, jailed. Ask Benazir. Assassinated. Ask Gilani. Disqualified.

And ask Imran. Already in dire straits.

A trend? A curse? Or a systemic malfunction? Something haunts the crown. Could it be an acute deficiency of competence?

Seven weeks into the Khanate of Imran, the lay of the land paints an eerily familiar picture. The lush green rolling lawns of unbridled optimism are slowly sliding into the descent to despondency. You can smell the fear of inflation and the stench of stagnation. Our threshold of pain is about to be tested.

But here’s the funny thing: Imran of the Khanate continues to say the right things. He’s got the issues identified correctly; he’s got the problems aligned precisely; and he’s got the ailments diagnosed properly. He is oozing passion and exuding determination. He should be on top of things.

And yet, contradictions are sweeping across the Khanate like a raging storm. Imran of the Khanate is saying the right things but not doing the right things. He has his heart in the right place, but doesn’t have his team in the right place. He is talking the big talk but not painting the big picture.

In short, the captain is playing with a cross bat on a leg break delivery.

The problem starts with the rhetoric. The soft-spoken and humbled Imran of the first speech has been replaced with the fiery, fuming and frothing-at-the-mouth Imran threatening the Opposition with vengeance. The soft-spoken and humbled Imran had united the nation in hope; the fiery and fuming Imran is dragging the nation back on to the container. If passion spills over into anger, how long before anger turns to bitterness which transforms into exasperation. A leader exasperated within seven weeks of being sworn in is not an endearing thought. Khanate can do with some less rhetoric.

It could also do with more focus on the big picture. Nobody expects the government to pull a rabbit out of the hat in seven weeks, but everyone expects the government to clearly map out and communicate its short-term, medium-term and long-terms goals and how it plans to achieve them. Two months into Imran’s reign, his Khanate remains fertile with concepts and barren with details.

For instance, the grand concept of fixing the budget deficit with recovery of looted wealth has smashed into the reality of IMF’s necessity. Likewise the concept of crowd-sourcing the dam has slammed into the reality of the pitiable amount donated by overseas Pakistanis. And what of the mega-housing project? The concept of providing home ownership to low-income citizens runs the danger of being bogged down under the weight of vague financing. If the Prime Minister is drawing up concepts, who is crunching the numbers to turn these plans into deliverable projects?

The tyranny of numbers, as it turns out, is just about to be unleashed. As per the story by Shahbaz Rana in this paper then other day, “the International Monetary Fund (IMF) has projected that the average inflation rate in Pakistan might hit 14 per cent by June next year — a level that if reached could result in interest rates peaking to 15 per cent and economy drastically slowing down…IMF is also projecting economic growth rate of below 3 per cent for the fiscal year 2018-19.”

As a comparison, “the average inflation in the first quarter of this fiscal year was 5.86 per cent.” And you thought stuff was expensive then. Buckle up.

Prices are about to go through the roof. Gas has spiked, electricity is primed to do so as is petrol. The rupee will suffer yet another devaluation, and that trip to the grocery store will make you weep tears of financial blood.

The story continues: “Once the inflation hits the roof, it would be impossible for the State Bank of Pakistan to keep the real interest rates negative. In such a scenario, the IMF would push Pakistan to hike the key interest rates to a level which should be slightly higher than the inflation levels…” (14 per cent projected).

As a comparison, the interest rates at the start of the year were six per cent approximately.

Such high interest rates would mean borrowing from the banks becomes terribly expensive, which in turn means tightening of the money supply, which in turn means less money available with the government and the private sector for investment, which in turn means a slowdown in job creation, which in turn means…well, you get the drift.

The Khanate is barren for details. By going to the IMF, the government has lost face and gained time. What will it do with this time? The Khanate is barren for details. We restructure and reform the economy once we get fiscal space through the IMF loan, says the government. Brave words. But what kind of restructuring and what sort of reform? The Khanate is barren for details. We will turn around Public Sector Enterprises and thereby stop the bleeding of billions of rupees, claims the government. But will they turn around these white elephants through privatisation? Through massive reduction in employees’ strength? Through some ingenious sleight of financial hand? The Khanate is barren for details.

When people are being told to brave the economic storm about to hit our shores, they deserve to be told how the captain will navigate them out of it. Remember that $200 billion of looted wealth that the PTI was supposed to bring back? Remember the avalanche of money that the overseas Pakistanis were expected to hand over to the captain once he was in power? Remember the towering claims and mighty boasts?

Not happening.

The PTI has had to eat its words. Sadly the people cannot live on words alone. So where is Plan B, Prime Minister? What happens to the Khanate after the IMF?

You don’t sit easy on the Iron Throne.

Published in The Express Tribune, October 14^th, 2018.

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