THE interim administration under Prime Minister Anwaar-ul-Haq Kakar appears to be in a hurry to set some sort of an economic agenda of its choice for the future elected government. On Thursday, Mr Kakar told businesspeople in Karachi that the interim set-up’s objective was to leave behind an economic blueprint for the next dispensation. But he did not elaborate.
The same morning, some of Pakistan’s industrial tycoons, who were invited by the caretaker government to be part of the recently constituted Industrial Advisory Council to advise on the formulation of a long-term industry policy, met in Islamabad to find ways and means to rescue the economy, and raise exports from $30bn to $100bn over the next five years.
From media accounts, it can be inferred that they came up with nothing substantive. Such an outcome would hardly be unexpected. The majority of members of the Council represent industries and businesses — textiles, automobiles, fertilisers, etc — that have thrived either on heavy government subsidies or protection from competition.
They wield enough power to force any government to alter economic and financial policies to suit their interests. What they want is known to all. The commerce minister’s homily in favour of subsidies and protections for their businesses indicates as much.
Backed by a powerful establishment, the interim government has done a fairly good job at executing IMF-mandated policies and reducing market volatility in the last four months. That has helped Pakistan smoothly complete the IMF programme review and access the second tranche of $700m under the Stand-by Arrangement facility.
But does that give the caretakers the right to set the economic agenda for the political party elected to power in February? Is it fair to make long-term policies for the next government? Obviously no.
With the approach of elections, each political party will soon be announcing the economic programme it wants to pursue for the next five years if elected to power. Although there is a sort of broader political consensus on major economic issues, each party has a different approach to tackle them.
Setting a firm economic agenda for them through the formulation of long-term policies would be akin to tying the hands of the next government. Not only that, advisory councils formed by the interim administration are not representative of the sectors they are assigned to make policies for.
The Industrial Advisory Council, for example, lacks representation from most industrial sectors, especially small and medium enterprises, whose growth is severely hampered by an unfavourable tax system, poor access to bank loans, the absence of any regulatory or financial support from the government, etc.
Thus, it is advisable for the interim set-up to not exceed its mandate and to leave the job of policymaking to the representatives of the next elected government.
Published in Dawn, December 9th, 2023