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How to Rob Banks, Pakistan Style
The President issued an Ordinance late Friday evening amending the Banking Laws on confidentiality that was preventing the Pakistan Banking Council (PBC) from publishing the full list of loan defaulters including those who had their loans written off. Among the many bold acts of the Caretaker PM uptil now, this has been the most courageous by far. It is a clear indicator that the man means business, Moeen Qureshi’s present initiative can only be exceeded if he makes public the list of drug barons and their contacts in the various walks of life in Pakistan.
Those who are electoral candidates among the loan defaulters have uptil Sept 13 to clear their dues to be eligible for taking part in the general Elections. Since the list reads like a Who’s Who of the elite it is a safe bet that the non-politicians among the list must be cursing the fate that brought Moeen Qureshi to the fore and front in Pakistan. One hears a good deal of muttering about “exceeding his mandate” being bandied about. It is, therefore, safe to presume that this act will not go unchallenged, legally and extra-legally, by those who have plundered the financial institutions at will. The bank robbers committing armed dacoity in Pakistan have not managed to together equal even one-third of the figure written off on “merit”, Rs 1.50 billion, what to talk about the total default of Rs 60 billion, nearly US $ 2 billion.
The Countdown Begins
The Caretaker PM, Mr. Moeenuddin Qureshi, has given as his first priority the conduct of free and fair elections. With 70 days to go the polls for the National Assembly, the Countdown may have started but electioneering has not yet commenced in earnest. Despite that we are much further advanced today in the pre-election process than we were on May 26 when the Supreme Court scuttled the July 14 date set by Ghulam Ishaq Khan and Co, which only goes to show that there is much more confidence about the elections of October 6 being held in comparison to the July 14 date. One must also state that the present Caretaker arrangement inspires confidence about their neutrality as opposed to the Supreme Court-terminated Balakh Sher arrangement which was clearly partial.
While elections are certainly a priority, the first priority remains the economy. Because of the prolonged state of limbo, Pakistan’s economy has been under severe pressure. The uncertainty has added to nervousness among potential investors thereby knocking down the sequence of events that was to lead us towards economic amelioration. Inflow of investment is the main prop for bolstering the economy during the state of transition. To cater for the shortfall, PM Moeen Qureshi will certainly ask his friends in the World Bank and IMF for international aid to start flowing immediately. One feels that he would do better by asking for a Debt Moratorium/Debt rescheduling for a three-year period. The policy of liberalisation has meant the removal of bureaucratic controls in order to attract investors to a free economy. Unfortunately investors have stayed away due to the political instability but the free economy environment and its lack of checks and curbs has created an adverse economic imbalance to the detriment of Pakistan. Our foreign exchange reserves have dwindled alarmingly. Massive devaluation by India had already effectively undercut our major export earners, cotton textiles, the hiatus in early reaction has contributed to taking us to the verge of economic apocalypse.
The Continuity Factor
Mr Moeenuddin Qureshi, formerly Senior Vice President in the World Bank, effectively No. 2 of this international finance institution, has been appointed Caretaker PM of Pakistan for the period covering the elections and the installation of the elected Federal Government after the polls. In his first informal chat with reporters and journalists, he has emphatically emphasized free and fair elections as his first priority, adding that the polls should not only be free and fair they should be perceived by the general public as such.
While it is true that Moeen Qureshi is not exactly a household word in Pakistan, in Pakistani economic circles he is revered and respected as one of Pakistan’s finest economists, a man who had reached the pinnacle of international recognition on sheer dint of merit. After more than a decade (since 1980) as the No. 2 man in the World Bank, Mr Qureshi took voluntary optional retirement as only a US citizen could be President of the World Bank according to the Bretton Woods agreement. Having reached his level he wanted to devote his time to private pursuits as an international consultant. With established credentials as a non-political person acceptable to all parties but having international recognition, Moeen Qureshi’s selection was brilliant because it fulfilled both political and economic purposes. In this interim period where it is extremely important to re-open the in-flow Consortium Aid, there would be no better individual qualified to address this issue with his former colleagues in the international finance institutions. He has obvious credibility as a respected finance person in the capitals of the World, both among developed and developing countries. Lastly and most important, as a committed free market exponent he brings an economic continuity factor to Nawaz Sharif’s policies so that Pakistan does not stay in economic limbo. The people of Pakistan will decide in early October whether they want to support Nawaz Sharif or give a different mandate to his opponents. As such while Moeen Quereshi has ostensibly been brought in for political purposes as a neutral person having international experience, he has the added advantage of being a major force-multiplier on the economic front.