Prime Minister Shahid Khaqan Abbasi’s anxiety over mounting economic challenges, particularly on the external front, is explicable but his response, two months before his term ends on June 30, is baffling.

Instead of a nice wrap up plan, listing options for the incoming care taker set up to keep the economy on the growth trajectory achieved under the PML-Nawaz government, the prime minister last week reconstituted the Economic Advisory Committee (EAC).

The absurdity of the move was so glaring that even the designated members of the said committee declined to defend it. One, who wished not to be named, called it ‘an exercise in futility’ and ‘an act of desperation’.

‘Nothing less than a magic wand will be required to fix the economy in a few weeks’

“A country is not a private enterprise or a project that a successful businessman or a qualified engineer can handle. It is many times more complicated. Instead of black and white there are all possible shades of grey that you learn to distinguish with hard work.

“Politics is an art of the possible. Who expects Prime Minister Abbasi to set the economy right? He did what he could”, a hostile member of the debunked EAC commented.

Despite the projection of 5.6 per cent GDP growth during the current fiscal, Pakistan’s galloping imports, widening current account/trade deficits, depleting reserves, rising inflation, intensifying financial risk and rate hike point to mounting challenges, exposing economic vulnerabilities.

The regulatory duty hike to curb imports and incentive packages to scale up exports did not prove sufficient to tame the trade deficit. It is probably to cultivate the IMF as over the past four months the rupee was allowed to dip twice, losing one tenth of its value against dollar. It was around Rs104 in November2017. Currently it is trading at over Rs115 to a dollar in the kerb.

There is mild reversal in core negative indicators. The government claims that exports decline has bottomed out and there is 12pc increase over the first eight months of the current fiscal.

Workers’ remittances inched up by 3.4pc and FDI scaled up by 15.6pc during the period. The C/A deficit is increasing at a lower rate: from 210pc in the first month of fiscal 2018 it has been contained at 48pc.

The finance ministry spokesperson recently disclosed that adequate financing is already in place to ensure foreign exchange reserves do not cross down to two and a half month cover for imports.

Shaukat Tareen, former finance minister who declined the offer to become finance minister after Ishaq Dar’s exit, has been nominated to head the advisory in place of Dr Ishrat Hussain who led the last such committee.

When reached for comments Mr Tareen told Dawn that he has been invited to meet the PM to discuss the economic scenario and the scope of the EAC.

“It makes little sense to constitute an advisory committee two months before the expiry of its term. The economic situation is fine except for the external accounts.

“All they need is to raise a few billion dollars to release pressure on foreign exchange reserves”, the outspoken banker responded in writing.

“Nothing less than a magic wand will be required to fix the economy in a few weeks. The committee makes no sense unless the government was coerced by would-be-partners (IMF). The donors could be reluctant to start negotiations for future policy priorities with a team that is on its way out”, commented an economist privately.

PM Abbasi promised a response to Dawn in this regard but his position on the said criticism did not reach the paper on time.

Dr Ishrat Hussain, former governor State Bank of Pakistan, thought that a quiet exercise of consultation would have yielded better results. Talking about the performance of the defunct body he headed for the past four years he said it served its purpose.

“The body met at least four times a year. The mandate of an advisory body was not to arrive at a consensus on policy issues but to enrich the decision making process in the government with the knowledge of divergent opinions on issues of interest”, he said.

Commenting on the quality of the new advisory forum and as to why some people have been dumped, another economist said it reflects the feudal mindset of the PML-N hierarchy that boasts of urban politics and power base.

“People who have openly been critical of the government’s policies were dumped in favour of people of repute who have accepted the official narrative of growth and development”, another market watcher said, hinting at Ashfaq Hasan Khan’s exit from the committee.

Dr Hafiz Pasha, former finance minister and a leading economist was worried for the future. Sidelining questions on the economic committee he said: “The IMF is going to be very tough this time. We must put our house in order to gain ground in negotiations with donors to ward off a more severe crisis”.

Sartaj Aziz, the planning minister, was approached but he did not respond.

The EAC is an informal body not obligated by the constitution and is generally formed whenever a new finance minister assumes office. The top official hierarchy that include secretaries of commerce, finance, industries and production, planning, national food security, revenue and textile division are inducted in the forum.

Published in Dawn, The Business and Finance Weekly, April 2nd, 2018