But what of the turnaround?
A number of contradictory viewpoints seem to have developed about the economy. One, of course, is the government’s narrative, so aptly summed up in Marvi Memon’s description of economic indicators as “superb”. The central bank had its usual ‘autonomy’ on display also recently, praising the policy of the day despite a dysfunctional interest rate regime; not surprising after long years of having money supply held hostage to unceasing government borrowing. The Fund too found things pretty much OK, even though it disagreed with Ishaq Dar’s highest-in-four-years 4.1 per cent growth rate. Its own calculations put it at 3.3 per cent, lowest in five years, actually. Opposition groups, as expected, find very little to praise, especially in areas like power shortage, which the N league had promised to do much about during the election campaign not too long ago.
And it doesn’t help – not the government, at least – that the Institute of Policy Reforms has added to the noise by presenting yet another mixed analysis of the economy. It appreciates some positives of the new government especially in stabilising the economy, but notes that “a strong and sustainable ‘economic turnaround’ remains elusive in the presence of slow agriculture growth, recent loss of momentum in manufacturing, fall in investment an saving rates, severe energy shortages, stagnating exports, low tax-to-GDP ratio and a rising external debt burden”. That, coupled with the admission that improvement in forex reserves owes to “large one-off inflows”, makes it difficult to quantify whatever stabilisation of the economy that the report tried to project.
Weak economic performance is, in fact, proving the N league’s undoing. Its leaders made large promises and heroic assumptions on the campaign trail, and have concentrated largely on large scale projects since coming to power, not giving crucial economic indicators the attention the deserved in the people’s opinion. Had the economy, and subsequently people’s lives, improved, the government would not have faced the sort of political pressure it does. And while it is understandable for a sitting government to highlight its successes, it is just as important for those in power to take the downside very seriously. If the spend the time criticising their detractors on addressing issues that are raised, the turnaround might still be possible.
