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A view from Bangor, Maine

Almost nobody in Pakistan has heard of the city of Bangor in the State of Maine, USA. It is as far as one can go north in the mainland of the States and till recently was a base for the Strategic Air Command, as one lands at the international airport (direct flights to London also) one can see a clutch of KC-135 aerial tankers to one side. People in Bangor, Maine have heard about Pakistan though — mostly because of our PM, Ms Benazir Bhutto, witness the couple who asked us in the lift how she is faring and whether we were proud of her!

Bangor is a far enough place but not far enough to go and see a garbage to electricity project (a third world dream for cheap energy) — but the refrain about our return to democracy and the chord struck in the hearts of the American public for Ms Benazir was unambiguous, can we dare translate her international credibility and undeniable charisma into economic boon for Pakistan? Ms Benazir is her own mistress and the economic future of this teeming millions of this country are firmly in her hands, for a change for any leader of Pakistan she has the international community rooting for her and any mis-steps will have to be seen with a jaundiced eye, so much has she going for her. It is necessary to take stock of the situation rapidly and in the next 60 days lay down the foundations of a liberal economic policy, long on practical proposals and short on bureaucratic controls, that will carry us over the next decade well into the 21st century.

In order to achieve economic emancipation, the Government has to go against the grain of its party manifesto. The economy must be unshackled from bureaucratic controls if it is to be rejuvenated and checks and balances have to be firmly altered from overbearing caution to one of calculated risk, the essence of any business. Above all, the PPP has to ensure a balanced labour policy, one that will not militate against the entrepreneur, sending potential investment to the high hills. Labour must be kept in line, while ensuring that its genuine demands are met, a fine balancing act, the leading edge being with Ms Benazir because of the goodwill she banks with the masses, particularly the labour class. She must persuade the millions who believe in her that they must seek their just demands in a mature manner and not resort to measures that will disrupt the industrial peace. Only with sustained well-being of the industrial climate can we expect that the economic environment turns for the better, productivity being the only course to prosperity.

The political rhetoric shows no indication of abatement, the working lunch of March 22nd by Ms Benazir for Nawaz Sharif showing no immediate effect, the results will be more apparent in  due time. As important were the talks with the IMF, whatever news has filtered out to us from the Govt-IMF negotiations points to IMF hardening on some conditionalities while talking of  re-scheduling the time table, as if the recent Venezuela-example  does not point to discretion in the face of potential street  troubles, though the Venezuela example has had an interesting  side effect in the Brady Plan to offset Latin American debt to a  large extent. This Plan should be adopted for the whole of the  third world, Venezuela being a good example of the burgeoning  debt problem besetting developing countries. An important feature  of the Brady Plan is to involve IMF in the re-scheduling/writing  off of debts from the outset. Such an exercise is much needed by  Pakistan, a debt moratorium would do wonders for the economy,  giving the PPP some breathing room to come to grips with the real  problems facing the country. In particular, the PPP must take  concrete measures to restore investor confidence as the flight of  capital has adversely affected the investment climate. Investment  is particularly needed in medium industries, those that can take  the material being processed from our heavy industries. Pakistan  Steel, Heavy Mechanical Complex (HMC), Karachi Shipyard &  Engineering Works (KSEW), etc all need downstream industries  which can utilise their products usefully, if not then these  grandiose plants are just white elephants eating away badly  needed revenues. For example nobody can justify the purchases of  sugar and cement plants from abroad in the presence of the HMC  and ocean going vessels in the presence of the KSEW, it can only happen if concerned governing agencies were fattening themselves  on the gravy train.  The Ministry of Commerce has an important role to play in re-invigorating commercial business of the nation, particularly international trade. For the economy to start up again, we need a sustained effort in diversifying exports, paper schemes and theoretical arrangements are needed just as much as two left feet. We expected some movement in the matter of Barters and Countertrades but at this point of time, there has been no initiative in this regard from Government circles, so much so that even the Economic Chameleon Extraordinary of the 20th Century, Dr Mahbubul Haq, has surfaced from the woodworks in attacking the Government in “not having an agenda”. One thing about Dr Haq is that he works on the brazen principle that people have short memories, that his theoretical genius having reduced Pakistan’s economy to absolute shambles will soon be forgotten and like Destry, he shall ride again, one of the primary reasons for praying that the PPP regime stays in power.  Ms Benazir has a lot going for her, irrespective of political affiliation it behooves all Pakistanis to support her efforts to rejuvenate our economy. Her international credibility must pay dividends for this country, a largesse that is overdue for a deprived nation.

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