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EDITORIAL: The Pakistan Tehrik-i-Insaaf's (PTI) lawmakers' severe criticism of the government's performance during the parliamentary party meeting on the same day as the first meeting (Jalsa) by the 11 opposition parties Pakistan Democratic Movement (PDM) platform, in their four-month plan to oust the government, should be an eye opener for the Prime Minister and his cabinet. The reason for the in-house criticism is serious concerns about their re-electability given that the two indicators used as a yardstick to assess a government's popularity all over the world - notably inflation and unemployment - continue to perform very poorly. It also indicates that the government's narrative that the fault lies with the previous administrations' policies is no longer finding any traction within the party's law makers and is therefore unlikely to be supported by the rank and file of the party, leave alone the more than 22 crores who voted for the 11 opposition parties against the 17 crores who voted for PTI.

There is no doubt that the International Monetary Fund (IMF) programme for Pakistan envisaged upfront extremely harsh conditions but it was agreed and signed by the government appointed economic team. The implementation of the Fund conditions included debilitating contractionary monetary and fiscal policies that choked off private sector output with a consequent impact on unemployment and raised prices as too much money (attributed to a historic rise in domestic borrowing by the government - from 16 trillion rupees this government inherited to over 23 trillion rupees by March 2020 and no visible reduction in total outlay with the budget deficit rising to even more unsustainable levels) was chasing too few goods. This outcome was not unexpected as the IMF projected a growth rate of only 1.5 percent and inflation of 13 percent for 2019-20. The pandemic made the situation worse with growth downgraded to negative 0.4 percent, but to blame the situation entirely on the pandemic is not a true reflection of facts.

While the private sector began laying off workers pre-pandemic, a trend that gathered momentum post-pandemic, yet the government's decision under constraints of the IMF covenant not to raise salaries of civil servants and military personnel in the current fiscal year, a historical first, has simply made the impact of inflation all the more unbearable. In other words it is not only the private sector but also the government employees and the public sector workers who are visibly discontented with government policies.

Add the failure of the government to check prices of perishables by hurling accusations against those it terms as the 'mafia' (read cartels which effectively reflects poorly on the Competition Commission of Pakistan), Sindh's decisions relating to wheat (while ignoring the crisis in Punjab and KPK), and profiteers coupled with the threat of the tiger force monitoring the pricing situation and the government is now facing an increasingly alienated business community.

The Prime Minister and his economic team rightly argue that the impact of the pandemic on Pakistan has been much less severe than in other countries, but its claims that the policy announced in April 2020 providing incentives to the building sector (through grant of amnesty till end December 2020) and tax relief will restart the wheels of industry is yet to gather momentum. The August figures released by the Pakistan Bureau of Statistics for Large Scale Manufacturing (LSM) indicate a decline of 6.78 percent in spite of clear indications that automobile sales are up (after the end of the lockdown), export order books are full, and cement manufacturing is rising as a consequence of the April incentive package.

To-date the only major achievement of the government's economic team has been containing the current account deficit but the cost of that has been too high because the approach was not phased. Ministries engaged in productive sectors including the energy ministry continue to perform as poorly as during previous administrations, with the possible exception of IT.

The PTI law makers' concerns reflect genuine public concerns; the Prime Minister would be well advised not to quote past laurels in gathering large crowds as proof of his continuing popularity because in politics disenchantment can quickly set in if the quality of life is declining as it has been during the past two years. And all the pledges to put the "thieves" of yesteryears into jail and credit their wealth into the treasury, which incidentally remains a pending exercise, is not likely to sustain one's public popularity.

Copyright Business Recorder, 2020