How will the prevailing economic turmoil effect PTI?
Pakistan is going through one of its worprevailingst economic and governance crises in its 70 years history. Economic indicators are posing a negative trend continuously for some years. The fiscal and current deficit of the country has increased during the last decade. Budget deficit crossed the trillion figure and stands at Rs. 1.48 trillion.
According to Economic Survey of Pakistan, it stands at $18.267 billion and there is negative trade balance of $22.32 billion. It happened despite the availability of GSP+ facility during the last five years. Economic survey data shows that Pakistan availed the opportunity and exports increased to the EU market.
Current account deficit increased 50.5 percent during the period of March-July 2018. It reached $12 billion, which is 3.8 percent of the national gross domestic product (GDP). Trade deficit is the main contributor to the existing current deficit.
Energy crisis is still here despite all the claims of the previous government, where it claimed that they added more than 11,000 mega-watts to the national grid; but it was installed capacity not actual production. Data reveals that there was about 20 thousand MW demand of electricity in 2013 and production was around 14 thousand MW. In 2018 the demand and production are around 25 thousand MW and 20 thousand MW. That’s mean there is still gap between demand and production. Another important element is circular debt of energy sector, which is more Rs. I trillion. According to DEPCO Pakistan annually lost Rs. 213 billion on average during the last five years.
Apart from other factors bad governance and poor performance of institutions are main contributors. The government remained busy in overselling China-Pakistan Economic Corridor (CPEC) and ignored most urgent reforms in governance and institutions. The Ministry of Planning, Development and Reforms tried to introduced reforms but with less success.
The current situation presents a classical case to test the wisdom, vision, ideology and commitment of the Pakistan Tehreek-e-Insaf (PTI) leadership.
PTI can take it as a challenge and start to cry over the bad performance of previous government. It would be an easy way out, but it would be a bad choice and strategy. People voted them only to see a change. People expect them to bring prosperity in their life and sustainable opportunities of livelihoods.
Therefore, PTI has to take it as an opportunity to show people that they are committed to perform. Imran Khan’s victory also shows that PTI is committed to its slogan to bring a change. He emphasised on the need to alleviate poverty at any cost. He is also aware of the importance of governance and institutional setup. He is committed to curbing corruption, and bringing in transparency and accountability at all levels.
The government will have to ensure a smooth and result-oriented implementation framework to bring change for common people. For that purpose, the government will have to ensure transparency and accountability
It will be a mammoth task to bring change in existing governance and institutional structures.There is no doubt that Pakistan’s governance and institutional system is laid on the model of world best available models. However, it does not follow the world standard procedures to run the system. Globally, systems are run by a set of rules, procedures and laws but in Pakistan the system is more inclined towards individualism and personal links.
A nexus is present at all levels. Businesses support politicians to run the country, academia helps spread and sell the narrative and bureaucracy lays down the procedures to implement. PTI needs to start by breaking this nexus. PTI will have to devise a system, which cares for rules and procedures not personal links and the nexus’ interest.
It requires two tiers reform, first at policy and second at the implementation level. The policy framework must be made simple and easy to access. Complications must be avoided and there should be less space to play with words and rules. There is a need to make process simple and business oriented.
On the revenue side, the tax system is so complicated that people try to avoid it and it gives birth to corruption. It hurts tax collection and revenue targets are never met. Musharraf’s government tried to simplify the procedures and it resulted in an improvement in tax collection. It also helped expand the tax net and reached 2.2 million taxpayers in 2007-08.
PTI’s government must bring the policy formulation process under one roof and define the roles and responsibilities of all ministries, departments and different tiers of government. No policy should be made in isolation, and it must not be confined to only one sector. The government has to introduce the concept of joint policy formulation at one place and identify the areas of responsibilities for each ministry.
Lastly, the government will have to ensure a smooth and result-oriented implementation frameworkto bring change for common people. For that purpose, the government will have to ensure transparency and accountability. The government should look for solutions and ways to implement transparency and accountability mechanisms in the local context.
One way to achieve the objective of transparency and accountability would be to make information easily and timely available through a good model of access to information.
For all these reforms, the government needs a strong resolve and vision. The vision must be formulated on the basis of high quality knowledge and understanding the ground realities of Pakistan’s governance and accountability systems.
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The opinions expressed in this article are the author's own and do not necessarily reflect the viewpoint or stance of SDPI.