Hype and reality

Published November 28, 2022
The writer is a former ambassador to the US, UK & UN.
The writer is a former ambassador to the US, UK & UN.

NOW that the drama over the appointment of a new army chief is over, the government and opposition, as well as the media, should focus on the real challenges facing the country.

For weeks, the chief of army staff’s appointment dominated the political conversation and television talk shows, prompting endless speculation on social media. The impression this created was as if the entire destiny of the country depended on who made it to the army’s top slot.

This is not to say such appointments are inconsequential in a country that has seen repeated military interventions in politics and where the army continues to wield much influence and power. But the obsessive concern with the change of guard at GHQ made it appear as if this is the defining factor that will decide the country’s direction in the years ahead. This distracts attention from the issues that will really determine Pakistan’s fate and destiny.

It is how a confluence of challenges confronting the country are addressed that will shape the country’s future. The challenges are well known and so are their solutions. But it is for the political leadership to accord them priority and deal with them resolutely and consistently.

The most important challenges include a deeply polarised and fractured polity and problems of financial solvency, a stagnant economy, persisting education deficit and demographic dynamics characterised by a youth bulge.

The complex and serious nature of these interconnected challenges means that no single political party can deal with them on its own. This should urge political leaders to transcend partisan interests and forge agreement on core issues even as their political competition continues.

But divisive politics and hyper partisanship prevents sustained focus on the country’s problems, much less on evolving minimal consensus to resolve them. Heightened tensions, stand-off between the centre and opposition-controlled provinces and confrontational politics have created a fraught environment inimical to dealing with the country’s challenges. Deceleration of tensions is needed and a cooling-off period so that a degree of political stability is established.

Agreement between the government and opposition on a time frame for elections might help to achieve this, in which both sides concede on their maximum position to find a middle ground solution. This could bring down the political temperature and create a calmer environment necessary for peaceful and orderly polls.

But if the current political turbulence continues, uncertainty will inevitably have a negative impact on efforts to heal a deeply ailing economy. Economic recovery and finding a sustainable path to growth is by far the most consequential issue for the country.

Staying on track with the IMF programme is crucial as that enables Pakistan to access financial resources to meet its heavy external obligations. Around $34 billion is needed this fiscal year to finance the current account deficit and make debt repayments. Public debt is at a record high with the total foreign debt at $127bn. Reserves have fallen to $7.8bn, which cover just five weeks of imports. The rupee’s slide continues against the dollar. Concerns about a sovereign default persist, despite emphatic denials by federal ministers who have repeatedly maintained such alarmist views are mistaken.

It is how the confluence of challenges are tackled that will determine the country’s fate and fortunes.

Managing deteriorating public finances is urgent especially in the face of a volatile and unfavourable global economic environment. But stabilisation measures are necessary, not sufficient to put the economy on a sustainable path.

Beyond the IMF programme, rollover of loans by foreign creditors and more borrowing, a credible economic strategy is needed that charts a path to growth. The country needs a comprehensive plan and reforms to fix structural problems to end the vicious cycle of high budget/ balance-of-payments deficits and chronic foreign exchange crises that have led to repeated IMF bailouts.

Pakistan is now in its 23rd IMF programme. Unless structural issues are tackled the country will not escape from the trap of slow growth, low savings and investment, high deficits, heavy borrowing, growing indebtedness and soaring inflation.

Economic growth and sustainable recovery will only be ensured if there is an appreciable rise in private investment. This requires an environment and policies that build and sustain investor confidence. A single, liberal business regulatory framework for the country and commitment to policy continuity by political leaders can help foster an enabling climate. Conversely, uncertainty and political turmoil will keep investors in a hesitant state and undermine investment prospects.

Also consequential to the country’s future is the coverage and quality of education offered to its children. Economic progress cannot be achieved without a solid educational base. That is what makes the difference between success or failure of economic development. This requires long-term policy decisions. Yet successive federal governments have washed their hands off education using the pretext of the 18th Constitutional Amendment, which devolved education (other than higher education) to the provinces, while provincial governments accorded it little priority.

Decades of neglect and chronic underspending on education have left Pakistan with 22.8 million children out of school and earned the country the dubious distinction of having the world’s second highest number of children out of school. Exacerbating this grim situation are high school dropout rates and gender gaps. This has serious ramifications in view of Pakistan’s demographic profile, because unless the scale and quality of education is expanded, young people with no education or skills will face a jobless and hopeless future and a life of poverty. Rather than treat this as a national emergency, the education deficit has been wilfully ignored.

Similarly, the population time bomb that is ticking away barely figures in official priorities. The annual growth rate of two per cent is among the region’s highest. The demographic structure, with youth comprising 64pc of the population under 30, means almost 4m young people enter the working age population every year. This needs over a million jobs to be created annually. The combination of demographics, the education gap and a stagnant economy risks social instability in the years to come.

These fundamental issues, among others, will determine Pakistan’s fate and fortunes. It is the choices our political leaders make in the months and years ahead that will decide the country’s destiny — not who has been appointed army chief.

The writer is a former ambassador to the US, UK & UN.

Published in Dawn, November 28th, 2022

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