The president does have a calming effect of sorts about him. Be it addressing media frenzy about a (possible) flight to safety, or soothing upset business lobbies, his presence cannot be faulted for leaving too much unanswered for too long. So it was when he sat down with aptma the other day, their concerns about diminishing markets, decreasing exports and dilapidated production all settled in turn, quite amicably. And while energy shortage prompted a call to the petroleum minister, with promise of 5-day uninterrupted supply, the lower interest rate demand got a favourable nod as well. Very interesting.
Simply put, aptma has two simple demands. (It has had them for some time actually!). Ensure adequate energy and cheaper credit for the country’s largest industrial sector, 45 per cent non-farm labour force employer and 60 per cent export revenue contributor. And really that is about all it is in need of, for the time being. Two questions come up quickly. One, why did it take the president all the way till the end of the government’s term to realise the sector’s centrality to GDP growth (9 per cent)? Two, what did his spokesman really mean (Farhatullah Babar), quoting him, implying industry will needed “out of the box solutions” to grow and succeed and so on and so forth?
As is evident by the demands, solutions needed are quite straight forward. Without energy, industry can and will not reach its production possibility frontier. And without credit, investment, both local and foreign, will not come. Plain and simple. Now all that needs doing is ensuring the 5-day uninterrupted supply promise is honoured, and restoring sanity to monetary policy. That, of course, will mean the government must overcome its addiction to cheap money, retreat from the money market, and stop crowding out private sector investment. Text-book really, nothing out-of-the-box about it.