And beyond
Dar sb must have been delighted at the World Bank CEO’s comments in Islamabad the other day. It seems his own understanding of the social science – sometimes cruelly dubbed ‘Darnomics’ by some in the local press – has admirers right at the top of the World Bank food chain; CEO Kristalina I. Georgieva, no less. First, her jaws almost dropped at the infrastructure bonanza that the N-league has unleashed. It was, after all, her first visit since ’11. And she was not too conservative in her praise for the power plants and highways that have become text-book ruling party economic policy.
Then she was also happy that “the economy is doing well, growth has gone up, inflation has gone down…”. This could just have well come from one of the N-league post ’14 dharna shouting matches with the PTI. Yes inflation went down, and growth did indeed crawl up just a notch – though still nowhere near Dar sb’s own projection. But much of that owed to oil going through the floor internationally; something neither Nawaz Sharif nor Ishaq Dar, nor the World Bank CEO for that matter, have any control over. But that didn’t stop the ‘growth up, inflation down’ marketting line.
And now that oil is rebounding, how much of the low inflation environment does Dar sb, or Ms Georgieva, expect to salvage? Soon the deficit will feel the burden once again. And, as always, the government will increase borrowing from the local money market, crowding out private sector investment and initiatives. So much for the investment boom. However, for some reason, Ms Georgieva also noticed how “the benefits of (Pakistan’s) development are directed towards those who need it the most, and the people who are on the lowest ebb of economic opportunities”. Where exactly this community exists – where the lowest ebb thrives on stagnant wages and rising prices – has not yet been explained. Perhaps some will make their voices heard come election time.
