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It has become a practice for every incoming government to start its tenure by harping the narrative that “All bad by the previous government is being into good by the new government”. The incumbent government too started on the same note.

Within a week or so of its start, it was confronted with a power shortfall of 500MW to 2,000MW. This massive shortfall led to a countrywide load-shedding not seen in the last many years.

The reason made public by the government is that 20 out of 27 power plants were non-operational for more than a year and that the previous government did not purchase fuel for power plants in four years.

This was followed by the assurance that the present government has managed fuel and that 20 out of 27 power plants, which were non-operational, have now been made operational and that load-shedding will end by May 01.

Considering that power load-shedding was non-existent till the very end of the last government and such a quick fix by the incumbent government, the other narrative that the problem in fact relates to a lapse in the procurement and supply of timely fuel oil to power plants due to default of the previous government in its last days or by the incumbent government in its first few days carries more weightage and appears to be a likely scenario.

On a similar note, the current federal Minister for Planning Development, Ahsan Iqbal, expressed serious concern over the sluggish progress on projects related to China Pakistan Economic Corridor (CPEC) by the PTI government. The Minister stated: “How pathetic the delay on CPEC projects which is the potential game changer for the region. There is zero progress on industrial zones of Port Qasim, Islamabad, and Mirpur, which is unfortunate.

When you don’t value your investors, why would they come for investment? In 2017, the excitement around Special Economic Zones (SEZs) was so high that all major foreign direct investors were lining up to be a part of it. However, due to delay in projects, Chinese investors moved away. My top priority is to expedite the CPEC projects to restore the confidence of the Chinese investors and that regular meetings are being held for the implementation of the development projects.”

The reality is the paradigm shift in the CPEC, both on the Chinese and Pakistan side, driven by the growing cash flow and debt constraints of Pakistan. China is concerned about delays and non-payment to its contractors at the rolled out large infrastructure and energy projects while Pakistan is struggling, albeit unsuccessfully, to meet its contractual obligations. Acknowledging the realities, both sides agreed to realign the CEPC priorities by scaling down large projects and jacking up ‘Special Economic Zones’.

The incumbent government will not be able to bring back the early hey days of the CPEC where mega projects made the headlines. At best it can speed up and resolve the issues of existing large projects under execution and expedite SEZs’ growth. In years to come the CPEC will follow the cautious trail as set by the two governments. The future of Pakistan Railways $ 6.8 billion flagship ML-1 project is in doubt as costs stated in PC-1 feasibility are not acceptable to the Chinese side.

Finance Minister Miftah Ismail on the eve of his departure for Washington for negotiations with the International Monetary Fund (IMF), criticised the previous government for taking ‘unwise’ economic decisions, the worst among them being not to pass the increase in fuel prices on consumers and consequently, the present government had to approve a Rs 67 billion supplementary grant for April and as per Oil and Gas Regulatory Authority (Ogra), a Rs 68 billion monthly subsidy for the next two months (May and June) would be required.

The finance minister is reported to have successfully concluded the negotiations with the IMF. He disclosed that the IMF has sought increase in the prices of petroleum products as well as restoration of taxes and petroleum levy, withdrawal of industrial amnesty scheme, reducing circular debt, increasing electricity tariffs, and fiscal saving from the present government for revival of the EFF programme.

These reportedly are the same conditions that the then finance minister Shaukat Tarin, had encountered. Furthermore, PM Shehbaz Sharif in the meantime declined to increase prices of petroleum products.

It must be understood that the economy of a nation has its own dynamics based on substantiated figures and ground realities. A country’s economy speaks for itself through its numbers or statistics. It can never be influenced or dictated by one’s rhetoric.

The ‘all bad by the past government and all good by the new government rhetoric’ has no impact on the minds of people. In fact, it is repulsive.

Economy is for the nation and its people. It is not for political gains. The incoming governments will do good to themselves and the nation if they mend the mistakes of the past governments and add on to their good deeds and come up with realistic and tangible solutions in the larger public interest.

(The writer is a former President, Overseas Investors Chambers of Commerce and Industry)

Copyright Business Recorder, 2022

Farhat Ali

The writer is a former President, Overseas Investors Chamber of Commerce and Industry

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