Economy in Doldrums

Politics and economics has more or less become part of our daily lives. We owe a debt of ‘Gratitude’ to the over “100 blazing TV channels” who have invaded our privacy, that feed us with the real, fake and deep fake, news and rumours of both relevance and irrelevance.

We are continuously in our living rooms concentrating on the lives of the politicians (I have deliberately refrained from using the word, leader because almost none of the current breed fits the measure to be recognised as one), who are only fuelled with antagonism towards each other. They are ready and prepared almost willingly to lower their responses to opinions of others to the despicable base levels. Their choice of words is mostly disgusting. The audience begins to doubt about education and upbringing realities of our society.

Demagoguery in its cheapest format is the new definition of an accepted, vulgar and shameless democracy. The divinely blessed human pride and dignities is put into the grinder of deplorable and disgraceful humiliation, every single day, by all shades and hues of politicians.

At the fall of each government, what is on display in society is a true reflection of a statement made by Confucius in the year of 5th BC, “There is no spectacle more enjoyable to observe an old friend fall from a high roof”. (Jahangir Tareen and Imran Khan are a good reference point here). Persistently, each politician keeps gnawing at the reputation of the other. Admittedly, politics and economics has undergone radical changes; from the respectable environment of the decade of the 1960s to the current decade of decadence. The change has been for the worse in both aspects that is, politically and economically. Add to this the related inducement of a pitiable decline in the moral and social standards and we have the land of the pure.

It is so comical to find caviar eating politicians talk about poverty. Those who live in mansions argue so brilliantly the cause of the homeless! Compare the number of bedrooms in those lofty mansions of Lahore, Islamabad and Karachi with the vastness of a Jughi. (Hutment). That the large size of the Jughi pains and bleeds their hearts is a mockery of poverty. Unfortunately, the multitude falls for the ridiculous rhetoric. They still vote for corruption.

“Inflation is the lack of discipline; the lack of discipline in the buyers and the lack of discipline in the sellers… prices must remain stable.” This Hitlerite view of inflation is not only interesting but worthy of a debate to bring about discipline among the various economic factors and fundamentals.

The madness in the political theatre of Pakistan is causing long-term damage to the state of economy. People, like always, hope endlessly that the damage remains repairable and is not irrevocable. Even before the start of the current political instability, the economy was more or less on a ventilator, and that too, on a borrowed machine from overseas.

The fundamentals aren’t looking good at all. Exports are stagnant, the nominal monthly growth is so dismal that it is not even worth the merit of any attention. The media (friendly to the government) incorrectly hypes the export figures, with bold font headlines to pronounce growth achieved. However, the devil lies in the details, and upon a complete reading of the news item, one gets to conclude that the caption, at best, is misleading. Our exportable surpluses are far and few.

They can all be summed up in a single digit, unfortunately. The export landscape hasn’t changed much in the last 50 years, it is still textiles and its related products; rice, wheat (which is later imported at exorbitant prices), sports goods, surgical and medical instruments and some, which are of no consequence, at least in terms of generating forex value. The minor compensating addition has been in the area of software exports and pharmaceutical products.

The business community of Pakistan, barring those operating out of Sialkot, pay scant attention to research and development (R&D). Research involves cost and; hence, is avoided by the entrepreneur. Results of R&D that promises the return now and here, is undertaken with great zeal and enthusiasm. Nothing would change on the exports scene, unless the entrepreneurs look at R&D as an investment and not a cost. New products for new markets is the demand of the time; dependability on a few markets, is economically suicidal. Our takers of textiles and home textile products are the markets of the America’s and the European Union.

The need to diversify is critical. To do so it requires strategic thinking at the political and bureaucratic level. It cannot be just left to the politicians, who are never out of the ambit of wanting to secure a win in the “next elections”. This impelling urge prevents taking any decisions that have propensity to give fruits to the nation beyond their lifetime.

Imports are surging. Both the essential and the non-essentials are imported into the country with total abandon to the growing trade deficit. As an example, we eat up palm oil worth $1.2 billion each year, this is to the delight of the cardiologists but certainly to the peril of the nation. The current account deficit is now exceeding $50 billion. Today our foreign exchange reserves are at the lowest ebb; we can sustain imports for six weeks only; while the standard for being a solvent country is that the reserves must be worth, at least, to pay for three months of annual average imports.

If it isn’t for inward remittances we as a nation would be completely bankrupt, financially too! The tax-to-GDP ratio is a blemish on our societal standards, values and behaviour. The remittances under the Roshan Digital Account (RDA) is an area that this scribe chooses not to comment; suffice to say, it is not a reliable and sustainable foreign exchange resource. It is further, another matter that these funds cost more to the state and exchequer. We are in the mire of deep debt. The economy has to ‘earn’ to repay the debts. We shouldn’t, ‘borrow a fresh’ to settle. This jugglery between lenders and us can boomerang badly should any of them decide to leave the stage, Saudi Arabia almost did this to us in the recent past. Today, Sri Lanka is facing its worst economic crisis since independence. We as a nation appear to be standing very close to them, economically speaking.

The economic challenges are manifold. Can these be addressed all together? No. Our policy makers will have to determine the areas for immediate focus and attention. Those economic sectors that would reap immediate growth must be attended to urgently. The government will do well to itself and the country if they do not look and portray with arrogance to the masses, the temporary gains of the badly weakened Pakistani rupee, as a statement of confidence, in their ability to turnaround the economy. The stock market in isolation is not the best barometer of economic wellbeing; so let it not be cited that its upward movement is an expression of the confidence of the business community, or the ability of the government to pull the throttle and take off from this major lake of dismay.

We need strict financial and monetary discipline. The tax collection has to be done with a ruthless attitude. The nation has to be prepared for the economic shocks that are likely to follow, once subsides on petroleum products are withdrawn and its burden is passed on to the consumers. The common man will be hit the most. To add to the common man’s existing and forthcoming miseries, some Wise-acre decides to make Saturday a full working day, the entire economic universe is moving towards a four-day week. This knowledge not being in their possession is no surprise. The cost of working on Saturdays will exceed any improvement in the productivity and or revenue.

The China-Pakistan Economic Corridor (CPEC) and the peripheral Special Economic Zones (SEZs) will surely die, a death, by belligerent neglect. Enough lip service has been paid. Action is missing. The requirement is to induce investors, local and foreign to bring in their capital and setup export-oriented industries, inclusive of the much-needed agro-based ventures.

The nation must learn to earn more, save more and spend less. Cheap government-sponsored employment creating programmes are best avoided because the experience of such initiatives in the past hasn’t been of any good to the economy.

A compelling question to ask is at what age, will the country learn and accept that the economic wellbeing and independence is impossible without a long-term political stability. The man on the street demands basic necessities and is not concerned with the form of government.

A committed honest leadership, with an efficient and incorruptible bureaucracy, matched equally by an affordable, swift and honest dispensation of justice, is the need of the hour. IK, you have a chance to return but with a major revision with your set of advisers and of course of your own attitude. From being a politician you graduate to statesmanship and not the other way around. A leader listens; talks very less. Actions need no speech.

(The writer is a freelance contributor)