WHEN you try to make a political capital out of an economic problem, it boomerangs on you. It may make you pay dearly both in terms of politics and economy.

Take for instance the case of water and power problem. Every one knew in the year 2000 that looming shortages of in the two sectors were just about to hit us. But the powers that be wasted almost five years trying to get a national consensus on Kalabagh dam. But when the military led government faced the un-scalable wall of opposition from its coalition partners in Sind whose political support was crucial for the regime, it backed off.

Still, no Council of Common Interest (CCI) has been convened so far to seek a consensus from the four provinces on the Diamir Bhasha site. Next, in order to keep the Punjab on its right side without annoying the MQM, the constitutional requirements have been ignored in the case of National Finance Commission (NFC) Award. The Oil and Gas policy announced with such fanfare in 2001 was rendered useless when the oil was capped at $35.

Who would then be interested in investing in this flag ship sector? And while investment in this sector was being discouraged, the oil marketing companies were being provided with all kinds of loopholes to rip off the domestic consumers.

Again, it appears the government has not refrained from making long- term economic promises for short-term political gains but without any intention of following up on these promises. Take for instance the promises to set up a federal statistical authority, an authority based on the element of competition to replace the Monopoly Control Authority, a dazzle center at the airports to display our commercial advantages in precious stones, a one village – one product scheme, carpet cities, expo centres, the textile cities, mega projects in Balochistan, the Rozgar scheme and a policy for the small and medium enterprise loaning scheme. These promises are still more or less in the files.

The long-term political and economic repercussions of all these unfulfilled promises including the certain- to - elapse programme of providing electricity and safe drinking water to every village by 2007, the election year, are likely to be staggering politically as well as economically.

Politics and the economy do not exist in separate water tight compartments. The two not only co-exist but also impact on each other significantly and more often than not, decisively. That is perhaps why as the country’s politics seems to be entering un-chartered seas one can feel and sense signs of wait- and- see in the economy. One can date this new phase in the economy to the signing of the Charter of Democracy in July this year by Pakistan’s two major political parties—the PPP and the PML(N). When the MMA joined the CoD bandwagon without losing much time, the stakes all around went up a number of notches immediately. And now with the no-confidence motion having been tabled finally by the entire Opposition to a man against the prime minister, the red alert signals seem to have started beeping in the corporate sector.

As it is, due to the terror of the NAB, most of the decision-making in the government has become the job of either the prime minister or the president, the two busiest people in the country. So, naturally decisions are getting delayed. And now with the political temperature shooting up following the tabling of the no-confidence motion, all matters are likely to go either to ECC or to the regular but not so frequent top level- twin chaired meetings at which both the president and the prime minister sit at the head of the table. This is certainly going to impact adversely on the pace of economic activities.

And ironically enough, it is the corporate sector’s alleged shenanigans that are being used by the Opposition to bring about a qualitative political change at the top. The charge sheet which the Opposition has submitted to the National Assembly Secretariat along with the no-confidence motion the other day actually reads like a charge sheet against big business and the official economic managers.

The opposition has accused the PM of misusing his powers in approving the Steel Mill deal, letting his friends and cabinet colleagues manipulate the Stock market crash, selling the Pak-Arab Fertilizer to the wrong person, giving the Mangla Dam raising project contract to his favourites, allowing irregularities in Port Qasim’s land and liquid assets’ handling, permitting irregularities in the earthquake relief operations, letting the oil marketing companies fix prices and make unearned profits, allowing mishandling of Human Development Fund, selling HBL, PTCL, KESC and National Refinery through non-transparent processes, allowing Defence Housing Authorities to grab government land and finally of allowing the emergence of cartels of cement, sugar, oil and automobile.

The charge sheet also accuses the PM of failing to control inflation and unemployment, letting the gap between the rich and poor expand, of not doing anything to stop the stagnation in the agricultural and manufacturing sectors, not adding a single megawatt of electricity generating capacity during his tenure, letting the law or order situation deteriorate, not convening the CCI to debate the dam issue, not following the Constitution in letter and spirit on the issue of National Finance Commission Award, pitting the armed forces of Pakistan against the people of Balochistan and South Waziristan and of letting civic amenities in Karachi to worsen.

Most of these allegations are directly related to the economy and the debate which would ensue in the National Assembly on August 29 on the no-confidence motion would certainly be used by both sides to score as many points as possible against each other further worsening the climate for accelerated economic activity and growth.

Resource-wise Pakistan never had it as good as it did in the last six years. During this period revenue collection almost tripled and the external flows, mostly unencumbered, gushed in as never before. But political upheavals and almost total lack of good governance has caused this exceptional advantage to go waste.

In the first year of its rule, the military government tried to find political justification for its perpetuation by letting loose the NAB and the military personnel-led tax extortion teams on the business sector. The ostensible purpose of this exercise was to nab the corrupt, pin down the bank defaulters and goal the tax evaders.

But in the process the economy was forced into a massive and prolonged recession. The situation got compounded as at about the same time the country found itself in the grip of frenzied political activity as the ousted Prime Minister Nawaz Sharif was put on trail and then exiled.

Immediately after that, without rhyme or reason, but under the cover of empowering the people at the grass roots, the military government destroyed the civilian administrative machinery. Five years down the line, neither has the new system improved socio-economic delivery at the grass roots nor has it made any improvement in the law and order situation. In fact today the law and order situation in many districts is even worse than what it was before.

The year-long local bodies related electioneering and then the announcement of the Legal Framework Order (LFO), the 2002 general elections and the an almost year-long protest against the 17th amendment too had interfered with the economy. And the fact that in a matter of 22 months the nation saw three prime ministers entering the office one after the other also contributed its mite to the emergence of economic distortions.

As Prime Minister Shaukat Aziz, the third one in the line began feeling his way about, a bitter and contentious debate on the Kalabagh Dam was initiated and by the time it ended, there was this massive crash of the stock exchange. The Supreme Court judgment in the Pakistan Steel Mills case has handed a political sledge hammer to the opposition to beat the government with.

And strangely enough, the government on its part has been using as its defence in the public forums, the same arguments that were rejected by the superior court when the case was being heard and legal stalwarts like Sharifuddin Pirzada, Hafeez Pirzada, Khalid Anwer and Waseem Sajjad were pleading on behalf of the defence.

And those potential foreign buyers of our public sector units on the privatisation block are now perhaps finding it difficult to understand why if no corruption or irregularities were involved, if the deal was fairly transparent and no one from among the decision-makers was involved in omissions and commissions, did the Supreme Court rule the deal null and void.

Has the government in the process allowed the courts to second guess all the future privatisation deals? If so, then perhaps the future of privatization seems very bleak in the country.