Author: Najam Aziz Sethi
Publication: The Indian Express
Date: May 21, 2002
Introduction: Which foreigner wants
to come to Pakistan, let alone invest in it? With Musharraf embarking on
a political route that lacks credibility, which investor has confidence
in the longevity of his economic policies?
Mr Shaukat Aziz, the finance minister,
is perennially optimistic about the country's economic prospects. Indeed,
Mr Aziz has so mastered the art of "positive" thinking demanded by the
good general that not a frown marks his burrow even at the most testing
of times.
This is a technique inherited from
his, halcyon days as Citibank's roving "personal fund manager", when he
rubbed shoulders with the high and mighty, including Nawaz Sharif and Benazir
Bhutto. Indeed, if Mr Aziz appears to be even more sanguine than usual
these days, we must not grudge him his moment in the sun. General Pervez
Musharraf needs all hands on deck. And none more so than the great helmsman
in charge of the bread and butter issues of the day.
The general was well briefed for
his mass rallies during the referendum campaign. Forex reserves are up
to US$5 billion, he proclaimed. Debtrescheduling of up to US$12.5 bn has
been accomplished, he thundered, without explaining why higher domestic
oil and electricity prices had laid the public low despite falling oil
prices in the international market.
The trade balance has improved by
nearly US$1 billion, he added, leaving importers and manufacturers gasping
(If exports had risen by more than imports, the trade balance would have
improved but that hasn't happened. Instead, imports have fallen and exports
haven't risen). International donors are lining up to give us more foreign
loans, he boasted, making nonsense of his earlier promises to reduce the
national debt.
Privatisation is gearing up, he
pointed out, ignoring the number of times the sale of major projects has
been postponed. Remittances have more than doubled, he bragged, as if he
and his minister had anything to do with channeling them into the formal
banking sector in the wake of an American crackdown on Informal money transfers
since September 11.
Until September, the Musharraf government
was stubbornly ploughing ahead with "regional and national security policies"
designed to keep Pakistan in splendid international isolation. The dividend
from peace and trade with India was spurned in favour of sponsoring jehad
in Kashmir. The dividend from oil and gas pipelines from Iran and central
Asia was wrecked on the altar of the Taliban in Afghanistan. Then September
11 happened. The prospect of standing against the mighty US was too much
to stomach, even for commando types. But a great justification was at hand.
Our cherished nuclear, "assets" were threatening to become "liabilities."
So allies like the Taliban were
thrown overboard before they could say Jack Daniels, back-thumping friends
and coup-making colleagues who disagreed were sacked, and barely disguised
noises were made for soliciting economic "rewards" for enforcing the about-turn.
However, it didn't occur to the high and mighty that these very benefits
that they are so eager to notch up as their achievements today could have
been had a decade ago if misplaced notions of national grandeur in the
guise of national security hadn't taken centre-stage with the brass.
An about-turn on Afghanistan and
a freeze on Kashmir can hardly provide the basis for a grand economic recovery.
The optimism in Islamabad's finance ministry is not reflected in the industrial
hubs of Karachi, Lahore, Faisalabad, etc. Agricultural growth is down to
1%. Industrial growth is down to 2%, despite a resurgence in the textile
sector, thanks to a relaxation in international tariffs and quotas after
September 11. Private sector borrowing for industrial development is down
by 40% compared to last year. The fiscal deficit could hit.6% in June instead
of falling to the 4.5 % targeted two years ago!
With anti-West terrorism rampant,
which foreigner wants to come to Pakistan, let alone invest in it? With
General Musharraf embarking on a political route that lacks credibility
and therefore sustainability, which domestic investor has confidence in
the longevity of his economic policies?
With India breathing down Pakistan's
neck and itching to have a go which businessman wants to sin money in industry
when a devastating war could disrupt all his calculations? With America
insistent on tracking down Al Qaeda terrorists in every nook and corner
of the country and bent on provoking the religious fanatics to suicidal
lengths, who can predict the future of the Musharraf regime with any degree
of accuracy?
No, General Musharraf and Pakistan
would be much better served by Mr Aziz would apprise his benefactor of
the limits of "positive thinking" and steer him away from the dangerous
edge of national and international politics.
(The writer is editor, The Friday
Times)
