Jun 232008

By Afzal Bajwa

Pakistan’s transition from military rule of General ® Pervez Musharraf in uniform to so-called democratic dispensation has been highly turbulent to cause sharp economic downturn from a proclaimed growth trajectory of last five years or so. Ironically, the downturn started when the people were anticipating the fruits of the last economic growth to reach down. Last year when the then government of the Pakistan Muslim League (Q) with Shaukat Aziz as premier was bagging credit for the consecutive economic growth, the masses started the brunt of uneven growth.
According to the trickle-down mantra of Shaukat Aziz the 2007 was the year as promised by both President General ® Musharraf, and his puppet premier that the economic growth would trickle down to the masses. Musharraf and Aziz had also promised to provide, at least, clean drinking water to the citizens of the country by 2007. Similarly there were many other promises and vows regarding the distribution of the economic growth down the line during the same year.
Contrary to the anticipations of the general public to have some fruit of the country’s consecutive growth for the last over four years or so, they were forced to encounter an imbroglio in terms of judicial crisis erupting in March 2007. The judicial crisis that eventually became a political movement against General Musharraf started eating out whatsoever fruits of the proclaimed economic growth in the last five years. The tricky maintenance of the typical growth simply slipped out of the hands of the former caretaker government. The ruined economic management especially during the outgoing financial year that was the election year as well turned the public life into an economic nightmare. The unprecedented increase, still unabated, in the international crude oil added fuel to the fire of price hike.
Apart from other anomalies of the Shaukat Aziz style of economic management and short-term growth, the linkage of the domestic petroleum prices with the international crude oil rates was the most cruel step for the masses. Therefore, the policy of subsidies withdrawal and the adjustments of the domestic energy prices with the international ones in addition to the shortages ended up with a situation much more than a mere crises of management.
Now for being in a power sharing deal with General Musharraf, the presently ruling party the PPP, is also bound to admit that the country’s economy remained on a growth trajectory for the last five years or so. At the same time, the master of the regime namely General Musharraf still in Presidency is also to ensure the continuity of policies desired by the international financial institutions.
More than policy protection by General Musharraf, the incumbent government is bound to assure it to the IFI for the want of budgetary assistance afresh. It is hard to comprehend that how the economy staying on the growth trajectory for the five years or so slipped down to a level requiring external budgetary support.  However, this is a bitter reality that the country which was selling its debt instruments a couple of years back just to mark its presence in the international capital market, is now dependent on the external support to keep its deficits within a manageable range.
As Finance Minister Syed Naveed Qamar pointed out in a recent press conference, the growth achieved by Shaukat Aziz and his economic team was flawed for being short-term in nature and having no poverty coefficient. Though the minister accepted the figures of the previous growth, he described it as an uneven and short-term growth. “For instance,” he added, “the growth in the telecom especially the mobile sector was not to be consistent.”  Therefore, characteristically, the economic growth accomplished during the period of economic management under Shaukat Aziz, initially as Finance Minister and later on as Prime Minister, rather increased the incidence of poverty. Apparently, it looks paradoxical that the economic growth increases poverty but factually it is true that consumption oriented growth based on supply side economics is bound to widen the gap between the rich and poor.
Thus the economic downturn has emerged to be the cost of the political transition. Whether the transition ended with the so-called democratic forces winning the vote in the February elections, or is it continuing as yet like open-ended phenomena still remains as a million dollars question.
The PPP government claims that they have liberated the country from the clutches of the military dictatorship, at the same time, it has been falling prey directly to the Western forces. In case of General Musharraf well versed with the Western powers, the country’s economy was indirectly subjected to their desires. On the other hand, after attaining so-called democratic liberties, the current government is directly pledging its economic sovereignty in order to secure direly required budgetary support from the IFI in general and the US government in particular.
To simplify the complexity, it could be said that the public of Pakistan has been forced to pay the price the fruit they never received in terms of the economic growth. The precarious state of continued political uncertainty and the economic decline has compelled the people of the country to bear economic hardships against such as political liberty that not even the government could attain so far.

Source: The Nation, 23/6/2008

 Posted by at 7:05 am

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