Window of opportunity: Government needs to stick to its tough stance

This is not the time to take back harsh decisions. It is also not the time to capitulate to industrial lobbies. PHOTO: FILE

KARACHI: The PML-N-led government has been in power long enough now for some of the initial euphoria to have died down, but business confidence is still strong and corporate circles are still optimistic that change will come. At the same time, exporters, industrialists and technocrats believe that tried and tested methods will not bear results and the government will have to think out of the box.

The World Bank has also recently issued a report which was prepared by the Pakistan Country Team that has come up with some suggestions which it believes can help the government achieve its goals. The report starts off by talking briefly about the aims of the current government.

The Pakistan Muslim League Nawaz manifesto “Strong Economy, Strong Pakistan” establishes a pretty steep benchmark right off the starting blocks with a target of 6% GDP growth and to get there it is looking to increase investment. It is focusing specifically on energy, agriculture and transport. Energy is perhaps the key issue facing Pakistan today and the Nawaz government wants to tackle this by reducing losses, corporatisation and privatisation of energy companies, rationalizing power tariffs and reducing subsidies.

The government also aims to increase revenues, which is not limited to just tax revenues and this is easier said than done. To do this the government wants to try and improve documentations, reduce subsidies and losses in state-owned enterprises and to reduce government borrowing.

And last, but not least, the government wants to improve Pakistan’s human capital by improving education, health services and social services.

All of these are admirable goals but they will not be easy to achieve. The World Bank policy note being referred to attempts to present a guideline for the government that can help it in achieving these admirable, yet ambitious targets. While the country has made progress democratically, with the first successful transition from one democratic government to the next, economic growth has been dismal.

While it is true that Pakistan has had to deal with a lot of other factors like natural disasters, the war against terror and a deteriorating law and order situation, it is also true that this just reinforces the need for strong leadership with a clear vision, well laid out plans and sustained implementation. Each and every government that has come to power has indicated that it knows about the problems and wants to fix them but the above three ingredients have been lacking. Any two of them, but missing the third, will be a recipe for failure.

One of the key ingredients missing in all governments so far, according to the report, has been strong political will and the ability to take tough decisions. The current time period for the Nawaz government is critical. It is always easier to make the tough calls early on. The first few months of any political transition always provide a unique window of opportunity. Making a bold start and then following through with solid and steady implementation will be essential.

This is not the time to take back harsh decisions like increasing documentation of the retail sector, or increasing power rates or asking the industry to stop using gas for captive power. It is also not the time to capitulate to industrial lobbies.

If the government can sustain its first six months in power without giving in to the demands of these pressure groups, the way forward will be easier.

Then they will come down to the actual implementation, and focusing on key areas that need to be targeted if they truly want to turn their manifesto “Strong Economy, Strong Pakistan” into a reality. We will talk more about that in subsequent articles.