The road to hell

Though paved with good intentions!

Despite protestations to the contrary, freshly inducted PML-N government was forced to walk into the bear hug that is an IMF programme. The international lending agency’s high-level delegation headed by director of the Middle East and Central Asia department Masood Ahmed – a Pakistani originally belonging to Lahore – is here to review the implementation of the programme.

Main Nawaz Sharif has personally assured the review mission that his government would fulfil all the conditionalities agreed upon for the $6.6 billion loan awarded to Pakistan. It is a case of ‘easier said than done’.

Pakistan is one of the most IMF-ed countries. Since its inception, it has gone into 19 programmes, most of them front-loaded including the present one. Most IMF programmes after first few tranches – some in the 1990s after just ‘one tranche’, leading to dubbing it as ‘one-tranche nation’ – were invariably abandoned owing to lack of will to implement them.

Now the same economic managers who had vowed ‘to break the begging bowl’, have assured the IMF that Pakistan will fulfil the conditionalities through this 13-tranche disbursement. The federal economic Czars have already jacked up energy prices several times over, have allowed the rupee to slide, sought savings from the provinces and have made concerted efforts to reduce the fiscal deficit.

Despite these measures, and the associated pain for the common man, the prognosis does not look good. According to the IMF delegation whom I met in Lahore, the prime minister is quite aware if the dire economic straits.

‘We did not realise that things were so bad’, is the oft-repeated mantra of the PML-N. This is not a good enough excuse for a party that remained in power in the largest province during the past five years and has been ushered in at the federal level for the third time. With a bevy of stalwarts in their party ranks, the Sharifs were – or at least should have been – aware of the country’s continuous economic slide.

While in the opposition, it was good politics to lambast the Zardari-led coalition for its corruption and malfeasance. And it was even better politics to promise that once in power, with the magic wand under his command, he would fix things in a jiffy.

Perhaps belatedly the PML-N government has realised that time is of the essence to attempt to resolve the myriad complex issues confronting the nation. Those who would previously claim ad nauseam on different talk shows that the problem of load-shedding would be fixed in three months now are often found eating crow.

The real problem facing the government is the spiral of rising expectations. Thanks to the media hype and the PML-N own rhetoric, people have become impatient. They want immediate results, which are simply impossible to achieve in the face of stark ground realities.

The IMF at the end of its mission has given a sobering assessment of Pakistan’s economy, saying that it was at a high risk of deteriorating into crisis and growth was too slow to significantly improve living standards. An IMF programme in itself is not a recipe for growth.

As a result of the conditionalities electricity tariff for industry has incrementally gone up and the rupee has been allowed to go into a freefall. Consequently our industrial sector has become even more uncompetitive.

The Fund has acknowledged that inflation hovering around 6 percent would now go into double digits. Similarly, rising oil and commodity prices as a result of the Syrian crisis have not helped matters.

Mian Nawaz Sharif is probably fully aware of the serious risks the country is facing owing to rampant terrorism and deteriorating law and order situation. Nonetheless mixed signals are emanating from the prime minister.

He has made concerted efforts to fix law and order in Karachi. Launching an operation after building a consensus amongst stakeholders was a smart move. As expected, the MQM is crying foul, claiming that Mohajirs were being singled out.

Unfortunately the MQM backed posse of thugs roaming the streets of Karachi and inflicting mayhem on the citizens is the nub of the problem. Instead of complaining, its stalwarts should resist the tendency to protect criminals in its fold.

The MQM has protested that why the Taliban in control of certain areas of Karachi are being spared. This is a legitimate complaint.

However the government having gone into the negotiating mode as a result of the recently concluded APC (All Parties Conference) is not keen to ruffle the Taliban feathers. Admittedly negotiations cannot be held with terrorists who refuse to adhere to the constitution of Pakistan and want to replace it with a state based on their narrow interpretation of sharia.

That said, if the state wants to go through the motions of talking to those who are willing to remain within the ambit of the constitution of Pakistan, so be it. This could mean talking to the Punjabi Taliban, who hitherto has spared the Sharifs stronghold. But can they be allowed, along with Lashkar-e-Jhangvi, to continue to treat the Shia community as fair game?

The government and the security establishment can take its own time going through the circuitous process of conducting negotiations with the militants. But perhaps in the ultimate analysis using force against terrorists is the only answer.

Similarly on the economic front the prime minister and his economic team need to reset their bearings. Grandiose schemes of constructing motorways, tunnels, new cities and bullet trains from Karachi to Khyber can wait for better times.

Right now fire-fighting is needed to put the economy on a sound footing. The present low growth rates, high inflation and a precarious balance of payments situation is a recipe for disaster.

With the absence of the will to tax those vested interests that form the core of the PML-N’s traditional support base, tax to GDP ratio will remain abysmally low. Simply put, without bringing structural changes, the economy cannot move forward.

Thankfully the government has decided to privatise PIA, the ailing flag carrier by divesting itself of 26 percent of its shareholding. Who will buy an airline that has become a bottomless pit though is a moot question. Ultimately it just might shut down.

A similar recipe should be applied to the Steel Mills that has bled the exchequer for billions of rupees. It would have been privatised during the Musharraf regime, but the apex court threw the baby with the bath water when it declared the process non-transparent. The present government could face a similar problem as has been pointed out by the IMF team while citing reasons for a non-performing economy.

Mian Nawaz Sharif is running a tight ship. His intentions seem to be good with his team not tainted even by a whiff of scandal so far. But he must keep in mind: ‘the road to hell is paved with good intentions.’

The writer is Editor, Pakistan Today.