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Between hype and hope

Updated August 22, 2013

WARNING signs that the new government in fact has no real ideas and represents no real change are mounting.

Monday’s televised address to the nation brought back far too many memories of the last Nawaz Sharif government, and then to add irony to it all, the prime minister went ahead and invoked those days as some sort of golden age.

The briefest flicker of hope that some of us allowed ourselves, in a moment of weakness, following the elections is now drowning in hype. More than half the address was dedicated to economic issues, yet not a single coherent thought emerged from it all.

In the eighth minute of the hour-long broadcast, for instance, he started talking about the Nandipur power scam. Puzzling as that affair may be, let’s not kid ourselves either. That project was not about to solve our energy crisis.

Next he went on about the cost escalation in the Neelum Jhelum project, and once through, spoke at length about how the circular debt had to be tackled in the earliest days of his government, saddling it with a Rs480 billion bill in the closing days of the last fiscal year.

After the circular debt, we heard how the theft of electricity is one of the biggest problems, and how shifting coal-based power generation will take years. “There is no quick fix,” he told us, all while trying to keep a conversational tone. “You’ve heard of the circular debt, haven’t you?” he asked at one point.

With top billing in the address, and given all the minutes dedicated to it, the power crisis got only a gamey treatment.

The worst fear always was this: that they will only pour a bucketful of money into the circular debt to get the engines whirring again, hike the tariff to generate more funds for the future, and more or less call it a day. The fear was that the rest was all just window dressing, packaging, hype.

With the televised address, I’m a step closer to accepting this may actually be the case. In fact, part of me saw the whole address as window dressing for one announcement, buried somewhere around the halfway mark, where an invitation for dialogue was issued to those who had “through a stroke of misfortune found themselves in the camp of the extremists”.

I doubt that fortune has had much to do with the creation of militancy in Pakistan.

If what part of me saw is true then hope has fizzled to hype, and the hype will be chopped down by reality very soon. Further indications that besides the invitation to a dialogue the rest is all hype came after the section on the militancy and the politics.

We heard about a ‘trade corridor’ with China —Musharraf era rhetoric — even though we’ve seen very little work on the impact that this supposed expansion of trade is going to have on our domestic economy. Not all trade is beneficial, and the road to opening up trade routes is usually long and winding, requiring meticulous work on the details.

No such work has been done in the case of the Pakistan-China trade relationship.

Before we can talk of having an expanded trade relationship with a large country like China, it will be necessary to first evaluate the impact of the free trade agreement that we have with China, and perhaps do detailed sectoral studies to assess the impact that this growing trade will have on the local economy.

There should have been a long and detailed process of consultation with business groups, and at least a couple of dozen conferences between Pakistani and Chinese economists debating the details of the relationship.

All of this has been done in the case of India. The number of studies and conferences and exchange of ideas and industry consultations is quite large. Why deprive ourselves of similar studious attention to our own economic interests in the case of China?

The answer is simple: we have no real economic interests, and even in the case of India, the slow pace of progress in the grant of MFN status derives as much from misplaced strategic calculations as it does from purely economic ones.

In the case of the China trade corridor, we got a rather optimistic take on how a road causes improvements in the lives of people, and how a road from China to Gwadar will automatically lead to betterment along the way. And after this simplistic hope, there came the customary invocation of China as Pakistan’s real and true friend.

One looks in vain for any articulation of a proper economic interest of any sort from this government. All the talk about Nawaz Sharif being a businessman and therefore having a better understanding of what the economy needs, of the air of seriousness brought by his cabinet, is turning to hype.

Economic management in Pakistan has always been about doing just enough to get the dollars from abroad, then sitting back and digesting the proceeds. We’re still waiting for evidence that this time things will be different.

The writer is a Karachi-based journalist covering business and economic policy.

Twitter: @khurramhusain