Glimmer or Mirage?
While the pall of dark economic gloom continues to hover over us, some short-term indicators have started to twinkle. We continue to face a horrendous economic situation, deepened by a chronic shortfall in revenues. The magic revised figure of Rs 305 billion is still almost Rs 100 billion away in the last quarter, there is the glimmer of hope that the worst may have bottomed out and we may finally be on the road to the elusive economic recovery.
For the common man there is no issue more sensitive than food, followed by water and electricity. Last year, due to faulty projections the last elected regime defaulted on adequate imports of wheat stocks on time, with the Caretaker regime maintaining the status quo of inertia, there were “atta” riots as wheat stocks plummeted. Some PML stalwarts in Sindh took advantage of the situation to turn “atta” into gold. Wheat in tons went across the border, primarily into Afghanistan but also into other adjacent regions. This time around, the government was taking no chances and fully 4 million tons of wheat has been imported to add to the surplus stock held because of last year’s excessive import. Add to this a bumper crop this year and we are fairly wallowing in wheat. This bumper crop has been due to policy initiatives in agriculture, where the agri-credit was raised from Rs 12.5 billion to Rs 30 billion, allowing farmers a 1:2 ratio of DAP to area instead of 1:4 ratio they previously used. With support price raised, this has resulted in 12-13% increased production with 4% increased average, a 2 million ton increase. To this add the success of the Canola crop in reducing our edible oil imports by an additional US$ 300 million last year and almost US$ 150 million this year. With a world-wide slump in textiles, our domestic cotton off-take has been reduced and we have an importable surplus, enough at least to keep feeding our traditional markets. Even though our textile made-ups have gone down considerably, it has been somewhat made up by a sizable spurt in the manufacturing sector, up by almost 16%, almost 60% of it policy-related. The most significant manna has come from heaven as oil prices have crashed the world over, saving the foreign exchange earmarked for this purpose. If “el Nino” holds back in Sindh where the wheat harvest has already started and any rains would play havoc, things may well look up considerably.
Pre-budget Economic Review – Economic (or Bubonic) Plague? – I
This is the FIRST in a series of THREE articles on Pakistan’s economy)
The Government of Pakistan (GoP) has boxed itself into a corner by its rhetoric about a supposed economic miracle which is far removed from the actual health of the economy and the portents of its future. A relatively moderate (but reasonable) performance by the present regime in the face of concentrated domestic and external economic adversity has come out in bad light because of unnecessary bombast. About expectations and targets set forth far beyond bureaucracy’s ability to accomplish, particularly because adequate documentation of the economy is lacking. Four areas must be studied to obtain a comprehensive overall economic review, viz. (1) Growth, GDP and Production (2) Public Finance (3) Relations with IMF and lastly but most important (4) Inflation and Prices.
The Inferno Within
For a person who led a relentless struggle in the 80s decade for the restoration of unadulterated democracy in Pakistan, Ms Benazir displays a remarkable obduracy in refusing to recognize the ground realities of the increasingly anarchical situation in Karachi. Though it is true that fate intervened rather fortuitously to her advantage, one cannot take the credit away from Ms Benazir’s struggle against dictatorship (and vestiges thereof) with respect to the restoration of democracy in Pakistan. The then Establishment tried to stop her in her tracks by the cobbling together of the IJI by Maj Gen (later Lt Gen Retd) Hameed Gul, the then DG ISI, but the people of Pakistan gave her enough NA seats to be the prime contender to form the Federal Government. Even when the sizeable MQM bloc changed sides in late 1989, she survived a vote of no-confidence in the National Assembly, mostly because both the intelligentsia and the masses continued to believe in her recurring song of democracy.
During her long stint in the cold, Ms Benazir had repeatedly pointed out that with drugs and Kalashnikovs flooding into the urban cities of Pakistan, particularly Karachi, there was a dire necessity to usher in democracy immediately to “counter the dangerous vacuum created by Martial Law and dictatorship at the grassroots level because of the lack of leadership duly elected by the people.” Her contention rightly was that a mixture of ethnic and sectarian bigots along with mobsters, drug barons, foreign-trained terrorists etc, would flood into this void, anybody who could wield power through the power of forcible suggestion, more potently, through the barrel of a gun. Ms Benazir Bhutto had very rightly advocated that the only solution to avoid apocalypse was to have free and fair elections at every tier of government so that credible, authentic leaders would emerge, with their roots in a rock-solid base because of the peoples’ confidence in their abilities and person.