NOTHING could have been more unfortunate for Pakistan than the continuing political sit-in drama in Islamabad at the most inopportune time.

The immediate material loss to the business and the economy has been roughly estimated at around Rs1trn in the shape of debt accumulation following the rupee’s depreciation, stock market erosion, revenue loss, fall in foreign exchange reserves and investor and lender confidence.

This does not include the rise in the cost of production and transportation, which could not be immediately estimated.

If the current political crisis is resolved, the government will have to make some extra efforts to bring the troubled fund programme back on track

The intangible repercussions are enormous and far reaching. At least two developments are noteworthy — the IMF programme and the Chinese president’s visit. The $6.8bn IMF programme has become uncertain, as the completion of the fourth review has been put off.

The proposed increase in electricity tariff, legal changes in central bank law through acceptable parliamentary process and redefining net domestic assets and net international reserves benchmarks have not only become politically difficult, but technically irrelevant too.

On top of that, the readjustment of the over Rs145bn revenue loss on account of gas infrastructure development cess following the Supreme Court ruling against it, the revival of the now-stalled privatisation programme, and recouping of the revenue loss and development activity are facing new challenges.

As a consequence, the expected $550m tranche this month is uncertain for now as there is nothing for the IMF executive board to convene a meeting on Pakistan (earlier tentatively planned for September).

Provided the current political crisis is amicably resolved, the government will have to make some extra efforts to bring the troubled fund programme back on track through restructuring of structural benchmarks and quantitative performance criteria. This may include conversion of some of the target objectives into prior conditions, given the past IMF practice.

Notwithstanding his preoccupation with firefighting negotiations with Imran Khan and Tahirul Qadri, there is little Mr Ishaq Dar can do to take corrective steps required to meet the technical targets set by not only the IMF but also the Asian Development Bank and the World Bank.

Here, no one else has to be blamed but the governance style of the PML-N. Just imagine, being a close relative of Prime Minister Nawaz Sharif, the finance minister has to be present in almost all meetings on political, economic, diplomatic or any other issue when presided over by the prime minister himself, and then follow up with them.

As if that was not enough, Mr Dar is reportedly heading a total of over 45 committees on various issues, including political and economic — ranging from the Bari Imam Complex construction committee to the parliamentary committee on electoral reforms and the one that is holding dialogue with the protesters. It would be a great achievement if the current crisis is able to shift this governance style towards an inclusive and devolved system of decision making and service delivery.

Besides, not that the three-week-long protest in front of the parliament was sending disturbing images abroad, the Pakistan Secretariat — which houses all the federal ministries and divisions — has been out of bounds for government employees, ministers and people having something to do with government office for a week now.

As if that was not enough, the Minister for Planning and Development Ahsan Iqbal announced that Chinese President Xi Jinping had cancelled his visit to Pakistan planned for the middle of this month to mark the signing of $32bn in investment agreements. He held Imran Khan and Tahirul Qadri responsible for the debacle.

“How insulting and disgraceful it is that the Chinese president would not come to Pakistan during his visit to South Asia only because of Imran Khan and Tahirul Qadri,” he said. “This is great embarrassment for us and a big diplomatic and economic blow” to Pakistan, he added.

Mr Iqbal said the two sides had finalised everything for signing agreements involving $32bn worth of Chinese investment. This included 14 power projects of 10,400MW, besides a number of other infrastructure projects like the Karachi-Lahore Motorway, Karakoram Highway and the Gwadar Airport and expressway.

The entire government, from the prime minister to the finance minister and from the ministry of power to commerce and communications to the Balochistan chief minister, had worked hard for almost a year for this visit, starting from the July 2013 visit of Prime Minister Sharif to Beijing.

He said projects of around 9,000MW were to be completed by 2016-18, and hydropower projects for another 1,400MW were to be completed by 2020. The list of projects targeted to be completed by end-2017 included the $3.5bn Karakoram Highway Phase-II for the upgradation and reconstruction of a 486km section from Raikot to Islamabad via Mansherha, and the construction of the 375km Multan-Sukkur section of the Karachi-Lahore Motorway at a cost of around $2.59bn.

In the railway sector, the projects included the $3.65bn upgradation and rehabilitation of the Multan-Lahore railway line, $40m construction of a dry port at Havelian (Abbottabad), and the $1.6bn Orange Line Project of 27km in Karachi.

Besides these, five projects — $104m Eastbay Expressway, $68m Gwadar International Airport, $123m construction of Gwadar breakwaters, $13m dredging of berthing areas and $740m integrated development of Gwadar city and related development infrastructure, including a free zone and an export processing zone, a hospital and a coal-based power project — were involved.

Energy sector projects included a coal-fired plant at Port Qasim (1,320MW), Sukki Kanari hydropower project (870MW) and Sahiwal (coal-fired 1,320MW), among others.

Published in Dawn, Economic & Business, September 8th, 2014