THE economic reform process has been a major victim of the ongoing political drama, which is now in its third week. The consultation process for all sorts of economic policy agenda is coming to naught.

In hindsight, it would not be unreasonable to expect a hard push on difficult reforms from a lame duck government.

Prime Minister Nawaz Sharif and his economic ministers and advisers have spent all of their time and energy in defending the power they assumed last year. They could do little to advance the agenda they had promised to the people before coming to power, as the federal capital has remained ‘containerised’ owing to security risks, forcing foreigners and people coming from outstations to cancel their visits.

During the entire month of August, Prime Miniter Sharif held no more than two meetings on economic issues: one related to arrangement for the proposed high profile visit of Chinese President Xi Jinping to Pakistan, tentatively scheduled for the third week of this month, provided the political tension subsides.

Despite prolonged face-to-face consultations and lingering videoconferencing, an already delayed fourth review of the $6.8bn programme with the IMF has not been completed yet

Except for presiding over a brief meeting of the Economic Coordination Committee (ECC) of the cabinet, the head of the economic team, Finance Minister Ishaq Dar, has not been able to concentrate on his responsibilities. His visits to the finance ministry have been very short and irregular over the last 20 days or so. The schedule of his routine meetings has been badly affected.

The corridors of the Pakistan Secretariat, where most of the economic ministries are located, give a deserted look as visitors find it difficult to navigate through the security infrastructure, with ministers and bureaucrats mostly relaxing or attending political meetings called by the prime minister.

It took a lot of effort at the ministry of water and power in its third attempt to put together members of the board of governors of the Private Power and Infrastructure Board (PPIB) to approve an extension in bidding for signature power projects of the PML-N. All other schedules for post-Eid events of the ministries of petroleum, commerce, privatisation and water and power had to be cancelled or postponed.

During July and August, disbursement for Public Sector Development Programme (PSDP) stood at just Rs28bn — about 5pc of the Rs525bn allocation. Normally, it should be at least 20pc in the first quarter.

The government functioning, as it currently is, would have lasting impact on macroeconomic indicators going forward.

Despite prolonged face-to-face consultations and lingering videoconferencing, an already delayed fourth review of the $6.8bn programme with the IMF has not been completed yet, with the disbursement of the next tranche uncertain.

But more importantly, major reforms, like correcting the generation and transmission network to reduce energy costs and line losses in the power sector, have come to a halt. The government has also failed to fill in major positions in regulatory bodies and heads of public sector companies.

Influential bureaucrats have already started tampering with the prime ministers’ directives and records to keep their friends on critical positions. The government has not been able to appoint people in key positions to complete the structures of regulatory bodies, including the Securities and Exchange Commission of Pakistan, gas and power regulators and the competition watchdog.

For the past more than one year, critical and multi-billion-rupee worth of state-owned companies like Pakistan State Oil, National Transmission and Dispatch Company, Oil and Gas Development Company and Pakistan Petroleum Limited are being run on ad-hoc basis.

The government has been articulating about reforming the taxation system and the power sector to improve efficiencies and increase tax collection. However, large signature power projects have slowed down over the last few weeks, apart from some steps taken for improving efficiencies in generation and fuel consumption.

There has been no structural change in gas tariff, while Ogra’s approved tariff revisions have been ignored on three biannual occasions: July 1, 2013, followed by January 1 and then July 1. Its alternate route to raise revenue through the Gas Development Infrastructure Cess has been hit by court orders.

Published in Dawn, Economic & Business, September 1st, 2014