TWO recent developments have brought Pakistan’s latest IMF programme into sharp focus. The rupee has weakened aggressively against the US dollar since June, losing over 7pc. At the same time, the government has sought to implement hefty increases in electricity tariffs in two phases, in August and October.

The latest increase, notified for domestic consumers and slated to be effective from Oct 1 but apparently under judicial review at the moment, also coincided with a steep increase in the retail price of different petroleum products, brought on by the depreciation of the rupee. The rise in the consumer price of the two commodities has been dubbed as a ‘power shock’ and a ‘petrol bomb’ by the media, and has stoked widespread anger in sections of society.

Understandably, and true to our past, in generating criticism of the recent measures, the media and others, including usually informed commentators, are viewing the current adjustments solely through the prism of Pakistan’s borrowing arrangement with the IMF. At a broader level, beyond the conditionality of the Fund programme, this is a grave mistake.

Pakistan is at the cusp of a wrenching adjustment process that has been oft-delayed to our own peril. While the design of the reform programme, including the pace and sequencing of the recent measures, can be questioned, the need for structural adjustment is as clear as day. Each delay that we have ‘successfully’ managed, has only made the disease worse, the prognosis more dire, and the required treatment more painful and protracted. Thus, trying to protect the rupee with limited foreign exchange reserves or inflows — and to questionable long-run benefit — is as foolhardy as it is to generate electricity at Rs15 a unit and sell it at Rs8.7 per unit.

The reaction of the different constituencies to the latest government measures to restore macroeconomic stability is disappointing to the say the least — and revealing. Political parties that had only recently waxed eloquent in their party manifestoes of the grave need for immediate reform, have been quick to gain political capital by criticising the government for moving decisively to correct our economic imbalances.

However flawed some parts of the government approach may be, such as its tax moves, the opposition needs to present a sensible and practicable alternate plan to the reform measures to be able to sound credible.

An important constituent or stakeholder of the entire reform process is none other than the Supreme Court — unfortunately by active participation, rather than by passive observance and forbearance. Sadly, judicial reviews and suo motu actions in a number of instances over the past several years, even with the best of intentions, have done little service to the cause of better economic policymaking — or to the wider goal of establishing institutional balance and equilibrium.

The Supreme Court would do well to calculate the real economic costs of its judgements — such as in the case of the Steel Mills privatisation that it stopped nearly seven years ago, or the scrapping of the Mashal LNG import project that Pakistan had finalised and was ready to launch in 2010.

In the case of the Steel Mills, more than Rs100 billion of public money has gone into absorbing the losses of this politicised and corruption-ridden entity since then. In the case of the LNG project, its stoppage has not only set back Pakistan’s efforts to gain access to new supply sources for natural gas by at least five years, if not more, with all its attendant consequences for the economy, but the price the country will have to pay to get the same amount is now likely to be several times that of the contracted price in 2009.

Similarly, by no stretch of imagination or malleability of interpretation of Article 38 of the Constitution, can anyone promote or secure “the well-being of the people” by directing what cost-recovery tariffs the government can or cannot charge for any commodity. In fact, in a tribute to the sagacity of Pakistan’s Constitution makers, Article 38 lays out the principle for securing the well-being of the people by the state — not by mandating full employment in badly managed public-sector corporations, or by setting the prices of commodities, or by determining wages, but by “provid(ing) for all citizens, within the available resources of the country, facilities for work and adequate livelihood with reasonable rest and leisure”.

Forcing the government to generate electricity at Rs15 a unit, and to sell it at Rs8.7 a unit is neither wise nor affordable — and many would argue, also without jurisdiction.

The response of the government to criticism of its policy measures is seriously hobbled on two counts. First, the finance minister has been aloof till now, and like his predecessor, has shown little inclination so far of building a consensus within parliament on wider economic reform. An aggressive and robust case has to be made, led by the prime minister and finance minister, for adoption of all the painful measures that we have so skilfully eluded so far.

This is a tall order, and requires a leadership role in engaging with all the different stakeholders in the process — including, more than ever, the provinces.

The second count on which this government loses any moral high ground in being able to push through difficult reform measures, is its low credibility on account of the perception of nepotism, cronyism and tax-avoidance surrounding its top leadership. Pushing through difficult reform measures under these conditions is going to be challenging.

The writer is a former economic adviser to government, and currently heads a macroeconomic consultancy based in Islamabad.