Govt must present clear vision, evolve economic consensus

Commentators say structural reforms key to lasting change in the country

There is a new man in the financial hot seat of the country but he will fare no better in dealing with the myriad of domestic and international challenges facing the country until the government steps up and undertakes comprehensive structural reforms.

This was stated by former ministers and commentators during a seminar on “Post-Cabinet Reshuffle Political Priorities”. The seminar had been organised by the Sustainable Development Policy Institute (SDPI) on Monday.

Dr Attiya Inayatullah, who served as minister in the government of Muhammad Khan Junejo, said that over the past two decades, unconscionable damage has been made to the economy.

She added that for the incumbent Pakistan Tehreek-e-Insaf (PTI) to achieve economic stability, they will need to evolve consensus over the economic narrative of the country. For this purpose, she suggested that all political parties must be engaged.

However, she stated that the PTI government had made some progress on introducing structural reforms but lacked an economic team which could deliver on the promises made.

The biggest challenge at the moment for the government, she said, was to satisfy the Financial Action Task Force (FATF) and getting out of its grey terror financing list.

Center for Research and Security Studies (CRSS) Executive Director Imtiaz Gul said that the government ran into trouble after it hiked gas, power, medicine and fuel prices. This turned the public sentiment against the government and brought into question its competence and coherence.

Gul was pessimistic about the current reshuffle in the cabinet, noting that it will not bring any significant change because the status quo continues with old faces.

Institutions such as Federal Board of Revenue (FBR), Oil and Gas Regulatory Authority (OGRA), Drug Regulatory Authority (DRAP) and the National Electric Power Regulatory Authority (NEPRA) have emerged as big cartels and making the entire country and the government hostage, he said.

Gul said that there was a dire need for lasting reforms and changing the fundamentals of governance within institutions to achieve financial stability coupled with revolutionizing simple processes such as tendering and procurement procedures.

General (retd) Talat Masood, a former federal secretary and political commentator, said that there is a need to strengthen the democratic norms and values in our society because no country can flourish without a democratic system.

Author and analyst Zahid Hussain said that the removal of Umar as finance minister sent the wrong signals to the financial and commercial quarters.

Such changes, he said, should not be abrupt and would not help the government even with a new finance minister.

He noted that the government lacks a clear strategy, vision and direction and that such change in faces only gives rise to political uncertainty and instability which in turn negatively impacts economic stability.

Hussain further stated that the sole responsibility of failure to overcome the current economic crisis cannot be put on Umar alone, rather the captain of the team i.e. Prime Minister Imran Khan must take the blame.

“Unless we introduce structural reforms in the economy, no IMF programme will help us in the long term,” he added.

Achieving political stability and structural reforms and improved governance should be the top priorities of the PTI government, he urged. But for this, the government must evolve a political consensus on a national economic narrative and a charter of economy.

SDPI Executive Director Dr Abid Qaiyum Suleri said though PTI government managed to improve the external trade imbalance over the past six months but failed to win the confidence of the people and the market, which deteriorated over time.

To control this damage, PM Imran tried reshuffling the cabinet but Umar’s removal was too early and his performance evaluation yardstick was not justifiable.

Further, he said that incoming Finance Minister Dr Shaikh will have to take measures which are similar to ones taken by Umar because few options are left.

Dr Suleri outlined the major challenges for Dr Shaikh would be negotiating the IMF programme, concluding FATF conditions and preparing and presenting the federal budget 2019-20.

“If the government wants to achieve the macroeconomic stability and overcome the economic crisis, it has to improve its relations with the opposition and Imran Khan also needs to control the ‘dressing room politics’,” he recommended.

Published in The Express Tribune, April 23^rd, 2019.