HERE is how things might play out in the brand new year that just rolled in. First thing to look for is whether the tension at the top will be dissipated or not. The tension at the top is the question of whether or not the government succeeds in getting an extension for General Bajwa. The first day of the new year kicked this into action as the talk of a critical legislative amendments required to fulfil the Supreme Court’s order entered high gear and the federal cabinet met to pass the necessary legal changes so they could then be placed before parliament.
Meanwhile, the option of a review by an expanded bench of the Supreme Court is being pursued simultaneously. That review petition was filed on Dec 26, the closing days of the old year. The fact that all doors are being banged upon shows the importance the government attaches to the matter. Getting the chief that extension, it seems, is of supreme importance to them.
All through 2019 we saw a growing role for the army in the running of the country’s affairs. The most visible example perhaps was the meeting between the army chief and the leaders of the country’s business community, the chief and the billionaires to put it simply. Other examples might include the placing of the chief’s name on the National Development Council, though it’s not clear whether or not this body has been used much since it was created in June 2019.
All last year the important role being played by the army chief in economic decision-making was an open secret that slowly revealed itself as the year wore on. Within the business community it was known that if you want to see results, find a way to bring your concerns to the chief’s attention.
Many of them, after the budget, tried to raise their issues with the new documentation requirements or the high rates of taxes imposed on their industry, but found little quarter. Even at the meeting in early October, Gen Bajwa was said to be steadfast in telling the businessmen that the larger macroeconomic adjustment under way in the country since the accession to an IMF programme was not going to be compromised. High interest rates were here to stay, and taxes would need to be gathered, he reportedly told them. But within the envelope of these constraints, some grievances could be accommodated, and that is where the conversation focused.
Economic matters cannot run on autopilot, nor can they be delegated to one or two men.
If 2019 was the year in which the role of the army chief in guiding economic decision-making became increasingly visible, then 2020 is the year when the prevailing tensions inherent in the current setup must be resolved. The biggest of these prevailing tensions is the sheer inability of the prime minister to lead or guide economic decision-making himself. This much is now evident. Imran Khan himself has a very limited role in economic policy, whether in formulating policy or implementing it.
But economic matters cannot run on autopilot, nor can they be delegated to one or two men. Hafeez Shaikh can get us onto an IMF programme, but it will take the concerted efforts of the whole government to stay on that programme and fulfil its conditions, especially if the conditions are to be fulfilled in a way that does not increase the burdens on the poor.
Take taxes or circular debt reduction as an example. Success in these efforts will only be possible if the cooperation of regulators, provincial governments and myriad government departments can coordinate with each other. And success on the taxes’ side can be defeated if failure on the power side leads to rising losses, rising circular debt, rising subsidy and penalty burdens on the exchequer. And this is just one example. Consider all that the government has to succeed at and you will understand the overriding importance of having in place a proper economic decision-making process that can operate across the government.
This vacuum at the top of the executive decision-making machine is what led to problems continuously landing up at the door of Gen Bajwa. As the ISPR press release made clear after the October meeting, security and economy are interlinked in important ways, and a strong security will be elusive in the context of a weak economy.
This year we will see more and more of this linkage, as the economic challenges continue to bite and the implementation of the stabilisation programme deepens. Soon they will have to move on structural reforms, state-owned enterprises, power-sector losses and broadening of the tax base. This year the government will need to add reform to its list of things to do, in addition to stabilisation, and that will increase the points of contact between the seat from where executive power is being controlled and coordinated, with the areas where the problems fester and the reforms need to find traction.
This will be the year Pakistan will need a strong executive to lead and coordinate the implementation of key economic decisions, and Prime Minister Imran Khan has amply demonstrated his lack of capacity in providing that leadership. So we will see who will be burdened with this responsibility, and what sort of changes might be required to enable the emergence of a strong centre of executive power in the country.
This is also the year that will see a return of stability to politics. Work on that has also begun, it would seem. The opposition cannot be hounded forever. For the far-reaching decisions that are required to put stability on a sustainable footing, political stability is as important as macroeconomic or social stability. Having attained the latter two, the year 2020 looks set as the year that will see the return of political stability, defined as the willingness of all political actors to play within the ambit of a universally agreed upon set of rules.
The writer is a member of staff.
Published in Dawn, January 2nd, 2020