What the ADBs of the world have to say
The government’s position on the dharnas has been dubious at times. First the N league’s wrote them off as insignificant – some of the more vocal party members laughing at the idea in the days leading to Aug14. And while the most of the time most party members are still not impressed by PTI and PAT’s show of force, some of the time some hold the protests responsible for very serious damage. It seems they are, at the same time, too insignificant to matter and serious enough to cause political, economic and diplomatic damage. Foreign dignitaries are avoiding Pakistan because of these protests, they say; the Chinese president being the most prominent. And international donors, too, are growing wary of the political deadlock, they like to add.
Yet while there can be little denying that many thousands protesting in Islamabad could have been far more useful for the country if they had turned their attention to the massive flood relief effort – even temporarily – there is also concern that the government might be leveraging their inflexibility for its own face-saving. Ishaq Dar, for example, might have to explain a few things about his recent interaction with the ADB. He was all smiles, understandably, while the visiting ADB president praised macroeconomic indicators, especially inflation. But there was also an awkward moment when the visitor refuted his claim from a day or two earlier, that the bank would provide funding for some of our most needed dams. He was fine again when there was talk of the political deadlock, that the bank, too, was worried about future funding if the paralysis continued.
Dar sb acknowledges that the macroeconomic framework reflects his team’s sincerity, but any concerns about its viability are the work of the protestors. In this way he gives the impression that the bank, like other institutions and capitals, is factoring the protests to be a long term phenomenon – not something that bodes well for the sitting government. It also gives the agitators another axe to grind; that the impression outside is that they matter. Reality is that financing is under strain because the Fund has had concerns of late. It, too, was impressed by indicators, but when tranche conditions were not met, the faucet was turned off. And as observed repeatedly in this space, most multi and bi-lateral donors take cue from the IMF. Therefore, it behooves the government to keep up the work that controlled the indicators. And if the stability owed to temporary, exogenous fixes, then it is advised to adopt more sustainable policies that bolster the real economy in the long term, instead of blaming other factors. The donors, too, will fall into place.
