EDITORIAL: The long scheduled and much-awaited Nawaz Sharif speech at Minar-i-Pakistan in Lahore – the same day as his return from a four-year sojourn in the United Kingdom, a period declared as self-imposed exile by certain sections of the media while his opponents lamented the VVIP welcome he received through facilitation by the state given that the courts had proclaimed him an absconder who, as per the law of the land, should have first reported to jail before filing an appeal against his conviction finally materialised.
In his address, he pledged to shun revenge even as he highlighted a long list of grievances against the judiciary and the establishment. Sharif then proceeded to criticise the performance of the Pakistan Tehreek-e-Insaf (PTI), a party still projected by all surveys to present a very serious challenge to the PML-N in the next elections, on two counts: not so obliquely by pointing out that the PML-N women supporters, unlike their counterparts in the PTI, were not prancing about on music, a statement that has generated considerable justifiable angst amongst women groups; and explicitly on the economic front with inflation registering a high of 31.4 percent in September 2023 unequivocally regarded as the major campaign issue for the 2024 elections.
On the economic front the former three-time prime minister compared prices of essential food items, electricity, and the rupee dollar-parity in 2017 against August 2022. Two observations are in order. First is the rather obvious economic fact that inflation even if very low does account for a rise in prices of specific items over time.
Thus, while the price of sugar, wheat flour and other items were lower in 2017 relative to 2022, yet they were higher than in 2013, the year the PPP-led government dissolved the assembly preparatory to the scheduled general elections in May that year.
Sharif did not take account of the marked variation in electricity consumed from month to month, with higher consumption during the summer months, and neither did he dwell on his government’s contribution to rising tariffs by agreeing to contracts that favoured the independent power producers (IPPs) under the China Pakistan Economic Corridor umbrella - contracts which allowed for capacity payments, import of expensive fuel requiring foreign exchange reserves and remitting their profits in dollars.
In addition, he did not take note of the steady rise in the circular debt, reflective of poor performance of the sector, for the past two to three decades. And finally, the rupee-dollar parity in 2017 was the root cause of (i) a massive rise in borrowed foreign exchange to prop up reserves that were unwisely used to intervene in the market to keep the rupee over-valued which, in turn, raised external debt servicing costs; (ii) exports fell leading to; (iii) the historically highest-ever current account deficit of 20 billion dollars.
And secondly, what has caused many an analyst to pause is Nawaz Sharif’s selection of the dates for comparison – 2017 till August 2022 or when the Shehbaz Sharif-led government had been in power for only four months, out of the total 16, and had succeeded in not only reaching the seventh/eighth review of the then ongoing Extended Fund Facility programme with the International Monetary Fund (inclusive of the expenditure revenue targets in the budget for 2022-23) but had made some major advancements in mobilising world opinion to support the July-August 31 million flood victims – an effort led by the then Prime Minister, Foreign Minister Bilawal Bhutto-Zardari and the Climate Minister Sherry Rehman.
The selection of the dates compels one to aver that the former prime minister’s objective may have been to protect the appallingly poor performance of his close confidante and relative Ishaq Dar, appointed as the finance minister on 27 September 2022 - performance evident from the data released from government sources, analysis by rating agencies, scathing criticism by the IMF in its Stand By Arrangement documents approved in July this year and of course the general public.
Sceptics however maintain that based on his past actions, Sharif’s failure to mention the economic performance of the last 12 months of his brother’s administration should not be taken to imply that he is unlikely to reappoint Dar as his finance minister if the party wins a majority in parliament.
One would, however, hope that better sense prevails and that he engages with independent economists before undertaking policy reforms that have become ever more critical with the passage of time as administration after administration, including his own past three administrations, failed to implement.
The public would no doubt fully support Sharif in his call for new beginnings which necessitate an out of the box well-informed decision-making process followed by speedy implementation, backed by sound economic policies and empirical studies, rather than on adhering to past policies that clearly and unambiguously contributed to the current deepening economic impasse.
His contention that his party’s narrative is that of development works, mega projects to be more exact, is now an out of date concept with poverty gripping 40 percent of the population of this country. Today, the low to middle income earners are compelled to sacrifice one or more items of their kitchen budgets – payment of electricity bills or school fees.
Nawaz Sharif must accept that the next elected government will not have the luxury of appeasing their loyalists and the elite capture of budgeted revenue and expenditure allocations must end that would almost certainly require taking politically challenging decisions or else with a restive general public the duration of the next parliament may be in months certainly not in years.
Copyright Business Recorder, 2023