THE very first concrete thing that Prime Minister Shehbaz Sharif did after his oath-taking as chief executive of the country was to convene a meeting to get a comprehensive briefing on the current state of economy, future challenges and the possible solution to stimulate economic recovery. According to media reports, he gave a number of directives including initiation of dialogue with the International Monetary Fund (IMF) for a fresh bailout package; clearance of tax refunds, provision of necessary infrastructure and support to entrepreneurs and investors to foster a conducive business environment, reduction of bureaucratic hurdles, creation of enabling environment for Small and Medium Enterprises (SMEs), formation of E-committee to rationalize membership on government boards and transition to smart metering in the power and gas sectors, aimed at reducing line losses and improving service delivery.
The focus of the Prime Minister on the economy is understandable as there was a dire need for stabilization and taking steps at a fast pace to provide much-needed relief to the people, who have exhausted patience due to record price-hike and the resultant squeezing of family incomes. It would, however, be a Herculean task to strike a balance between measures aimed at economic recovery and to meet expectations of the people from the new Government. It is widely known and believed that the coalition Government led by PML(N) after the no-trust move against the then Prime Minister sacrificed its political capital for the sake of economic interests and the future of the country. The sacrifice no doubt helped prevent the much-dreaded sovereign default but at a huge cost as the PML(N) not only received severe setbacks in all the by-elections held in the 6-month period but also faced reaction of the voters during the general elections. It is, therefore, to be seen what the Government has in store to strike a balance to avoid further loss of the ruling party’s popularity. There is no doubt that the outgoing caretaker Government took a number of bold measures in a bid to keep the economy running and there is need for continuation of the reforms and restructuring but in an innovative manner and not through the beaten path of making utilities costlier every now and then and adding tax burden on the existing tax-payers. The existing arrangement with the IMF expires next month (April) and it is the considered opinion of both local and foreign experts/credit agencies that the country will need another long term deal with the creditor to send a positive signal to prospective investors as well as bilateral donors. The Prime Minister has given a go ahead for kick-starting negotiations with the IMF and it will be a test of negotiating skills of our economic team to come out with a more robust road-map for economic recovery than the expected emphasis of the IMF on hiking power and gas tariffs, leaving rupee at the mercy of manipulators and increasing the rate of GST on a number of items, which is already on a higher side. The SIFC has been laying stress on attracting foreign investment in different sectors of the economy and now all eyes are set on the new Government as it consists of personalities that have personal rapport with the leadership of a number of countries that matter much for Pakistan as far as trade and investment is concerned. The PML(N) governments are given legitimate credit for their enthusiastic contribution towards improvement of infrastructure in the country. In this backdrop, there is no reason to doubt the intentions of the Prime Minister when he gives assurances for doing more to modernize the infrastructure. We hope priority would be given to acceleration of work on all the on-going projects under the China-Pakistan Economic Corridor (CPEC) and inclusion of more viable and economically feasible projects under its framework. Focus on SMEs has the potential to provide a sound foundation for realization of the dreams about industrialization and tapping of agricultural potential to the optimum. Smart metering can also help overcome some of the challenges facing the energy sector but strangely enough priority is being given to the already more efficient regions (like IESCO) than the Discos known for massive pilferage. This amounts to making mockery of the project of Advance Metering Infrastructure (AMI), currently underway in the Rawalpindi region. There are also complaints that power bills increased significantly when analogue meters were replaced with digital ones as they run faster and AMI meters could prove to be a repetition of that bitter experience. This exploitation of consumers must come to an end.
