PUBLIC expectations were high; the first televised address of Prime Minister Imran Khan reinforced hopes that his government was going to focus on lifting the collapsing economy with the kind of single-mindedness considered a hallmark of his personality.
Faith in the new government and its economic team did not falter in spite of the time it took in shaping up its response to the economic challenges it had inherited from its predecessor, and the warnings by its detractors, against delaying a bailout deal with the International Monetary Fund (IMF). After a few initial setbacks, the government appeared to be getting a handle on the situation.
Generous financial support from Saudi Arabia and the United Arab Emirates, promises of a better trade deal. Investment by China, a semblance of improvement in bilateral ties with the United States, falling global oil prices and a few policy tweaks appeared to have helped stabilise the country’s near-term economic and financial outlook, as well as keep the hopes of its supporters up.
A party that came to power on the promises of fixing the long-standing structural issues plaguing governance, federation and economy cannot afford to get bogged down in confrontation with the opposition or the media
But six months into power and its short-term external financing needs for the present financial year met, the PTI seems to be finding it difficult to keep its eyes on the ball.
Cabinet ministers are on a warpath with the opposition and the government has not been able to get the proposed economic reforms package it had tabled last month, through a second amendment to the finance act, passed. The National Assembly session had to be prorogued sine die before a debate on the package could even start.
The controversy over Shehbaz Sharif’s chairmanship of the Public Accounts Committee is bogging down smooth function of parliament.
The federal government’s relationship with Sindh, the only province ruled by an opposition party, is deteriorating because of its decision to put Chief Minister Syed Murad Ali Shah on the no-fly list in the so-called fake bank accounts case and rumours of attempts to dislodge or at least weaken the provincial administration.
The anti-graft rhetoric of the government is marred by allegations of political vendetta. Little wonder that a fractured opposition is now united and speaking with one voice to give a very tough time to the government.
That is not all, though. The government is also being seen to be muzzling the media in one way or the other. The attempt to ‘regulate’ the media — electronic, print or digital — through a single regulator despite the industry’s opposition has done little to inspire confidence in the PTI government’s commitment to free speech.
It’s failure to release the outstanding government advertisement arrears of the past several years is accentuating the financial crisis the newspapers and TV channels are facing because of reduction in private ad revenues on account of ongoing economic slowdown.
The attitude of its ministers has brought the government face-to-face not only with media owners but also with journalists who are trying to cope with job losses and pay cuts.
Business confidence, that took a severe hit because of the government’s anti-corruption talk, refuses to pick up and the markets remain in a state of flux.
In fact, it has added to the myriad downside risks to the economy, and despite some positive actions taken by the PTI administration to facilitate the industry, particularly exporters, the growth rate is forecast to dip below 4.5 per cent this year and drop further in the next fiscal year. That doesn’t bode well for a government struggling to deliver on its promise to improve the lives of the ordinary people to keep its popularity up.
The fear is that the prime minister will face massive difficulties in the enactment of the policies his government, which has a razor-thin majority in the national assembly, wants to enact for growth revival and provision of some relief to the middle-classes if it does not mend fences with the opposition.
The discontinuation of the session without a debate on and passage of the economic reforms package is an example of what the government is likely to face in the next budget session, not very far from here.
A party that came into power on the promise of fixing long-standing structural issues plaguing governance, federation and economy cannot afford to get bogged down in confrontation with the opposition or the media.
Its plan to create 10 million new jobs, lift millions out of abject poverty and build five million houses in its 5-year term depends on revival of the economy and exports. And this is simply not possible unless the government shifts its direction towards the economy and governance from its critics in the opposition or in the media.
Prime Minister Imran Khan will do a favour not only to the ordinary people expecting a turnaround but also to his party’s government by ordering his team to take a step back, cool down the situation and start mending fences in and out of the parliament.
Or he can choose to preside over a moribund economy during the remaining four-and-a-half years of his term in power.
Published in Dawn, The Business and Finance Weekly, February 18th, 2019