- The anti-corruption drive has been of little help
The maintaining of Pakistan’s credit rating at B+ by the Standard & Poor’s New York-based credit rating agency is not entirely bad news, as the agency has, so to speak, damned the country’s economic team with faint praise. The report said that the rating remained constrained by a narrow tax base and domestic and external security risks. The risks that were listed included a slowing of economic growth combined with high population growth, resulting in real growth this year of only 0.4 per cent, as GDP, S&P forecast, fell to only 2.4 per cent, a 12-year low.
Most hurtful would be the accusation by the credit rating agency that one of the internal risks remained corruption. The new PTI government’s campaign against its predecessors does not seem to have been acknowledged. More immediate would be the external risk factor of a long-standing risk of conflict with neighbouring states or non-state groups. The credit agency’s report may well be part of the structure built by the Washington Consensus institutions meant to buttress Pakistan’s dependence on themselves, like the IMF, but it should not be dismissed out of hand.
After all, some of the problems it identifies are indeed genuine. One of the metrics used, that of real growth, which factors in population growth to arrive at a real growth figure, is not exactly new, but a salutary reminder to Pakistanis of one of the major brakes on economic progress. Also, the report comes out at a time when the government is contemplating the issuing of a sukuk bond to clear the circular debt plaguing the power sector. This report must not be taken as an opportunity for one party to crow against another, but as an occasion where bipartisan solutions to the problems identified must be reached. With both parties in opposition differing from one another on issues other than that of the economy, it should be possible to agree on the broad direction in which economic policy should going, with the differences on how to get the there. At present, the debate seems to be on how to destroy each other, without contemplating how the life of the ordinary Pakistani is to be improved.