OPINION: Greed Economy and Curve Balls
“Mein Ne Paisey Banana Hai (I’ve to make money)…Kamana Nahin (Not earn). Kyun Ke Waqt Kum Hai Aur Muqabla Sakht (Time’s too short and competition is tough)”
IRSHAD SALIM — Pakistan’s economic and fiscal woes have been over a decade subjected to the “now you see it now you don’t” syndrome.
The “emergency response” handling of real and virtual issues by successive governments have been akin to taking Tylenol instead of injecting an antibiotic in the system, or accepting an open heart surgery to live longer.
We have been in a denial- after having made to believe the proverbial circumcision related “sonay ki chirya (golden bird) is coming. Hang in there.
And all the while, stacking up loans specially under CPEC which was primarily not supposed to be an ATM card for cash advances. These loans were used to build power plants in a hurry calling it “early harvest projects” which the common man on the street can’t figure out. I had written earlier, that in the short term (first phase) these loans would be painful followed by a massive gain for the country. This seems to be happening, and no one (specially the media) is being able to tell and explain why the elephant is in the room and how to get it out.
We have a situation though. As Ayaz Amir said in an interview recently, we don’t even have one economy-related journalist or columnist/opinion maker in the Urdu media- who can do it. The irony is more than 80 to 90 percent of us think, understand, analyze and rationalize in Urdu even though some of us deliver our communication in English- yet we comprehend in Urdu or our mother language. I call it a societal malfunction- and it’s growing along with other dysfunctions, which most of us accept with a smile, and a swagger, then turn around and say: Show me the money.
As a result of the CPEC’s ‘early harvest projects’, imports rose–much of it for CPEC though, and as a result several analysts on talk shows made CPEC the “fall guy”. There are more symptoms of prior mistakes, including symptoms due to past mismanagement finally coming to haunt us.
Resultantly, mammoth deficits, shrinking foreign currency reserves, low exports, higher import, diminishing tax revenues, a weak currency, external debt payments, and soaring sovereign debt to name a few, have forced the new government led by Pakistan Tehreek Insaf (PTI) to seek alternate resolution techniques coupled with firefighting.
Many consider going for the umpteenth time to IMF for bailout should have been the only one. Not really so–the strategy to seek loans from anywhere remained unavoidable given “time is of the essence” situation staring at us as a Deer facing headlights.
The situation now has morphed into a national security and needs actionable steps given the time constraints and our penchant for “jaldi karna” (hurry up).
That did not happen this time. It took some time. The output was creating alternate sources for managing fiscal crisis. And it worked.
Therefore, having considered a late start and late finish tactic to embed Pakistan’s other woes in IMF belly going forward would partially work, our thought-leaders so thought in my opinion. But the malaise is so deep (and of our own making) that the nation has been winked at over the years with “sub chalta hai” (everything is game) narrative in order to avoid calling spade a spade lest the winning party be voted out. Not any more. The State, the government, and rest of the governing (permanent) community are stoic.
So we (the gharib awam and the nouveau rich) must reap what we have been sowing in concert with whom we brought into power (for mutual self-aggrandizement). Understandably, indignation, denial, indifference prevail as though the fake sunshine shall never end. The party must go on many think ‘even if a crook leads the nation’, many told me. But every sunshine, real or fake, ends even if it’s man-made (some US laws) or God-given (natural) sunset rule.
“Mein Ne Paisey Banana Hai (I’ve to make money)…Kamana Nahin (Not earn). Kyun Ke Waqt Kum Hai Aur Muqabla Sakht (Time’s too short and competition is tough)”, is a conversation I’ve often run into when I’ve asked some of the youth I met: ‘what do you want to do, what are your plans?’
Therefore, the government ought to continue using its straight line method of depreciating and marginalizing fakeness and falsehood: pilferage, corruption, bribery, money-laundering, smuggling, etc. etc. At the same time, it should continue with its efforts for austerity, competence, accountability and call “a spade a spade”. Articulation in communication and honest but intelligent perception management are key now to re-calibrate past and present issues in Urdu (please). A dysfunctional setup and society needs stern, quiet but brave steps (example: China, Turkey, Malaysia, Iran).
From business standpoint: continuing to focus on export with emphasis in non-conventional products and services which lead to value-addition would help. Helping the youth become entrepreneurs (even in partnership) will matter. Training and sending skilled manpower overseas, developing tourism and creativity subsectors of the economy will be an added plus. . All these can be jump-started now and led to grow over the next 5 years or even a decade. Calls for statesmanship not politics though. We had enough of this elixir along with a Russian roulette economy.
The country’s unofficial economy, which includes cash and black and inappropriate transactions according to international standards, is not part of the performance indexes lending institutions keep scaling our capability and capacity. Nor does rating agencies like Moody’s and Fitch consider them when the chips are down–it’s an irony that these are our fixed assets though and when multinationals look at Pakistan’s business potential, the “cash economy” and “consumer base” of the country stand out like an opened doors of a taxicab in Manhattan.
They know that our consumers actual strength is the cash economy–nearly 70 percent of the GDP by an estimate, and discounted. Oh well.
We therefore have two choices which many have been procrastinating for lack of political will and high moral grounds–these are real currencies that are unfortunately amiss among us: A) So row the boat under the bridge or jump over, as we have been doing so over two decades- like the video above: https://youtu.be/ErDhBHuGDeM
Alternatively, B) we should keep deconstructing the old entrenched national habits brick by brick, and reconstruct bottom up–the parallax effect will hurt though (as it is now). That’s what the gripe is all about and reflecting so even at the stock exchange. We, however, have no other choice left (I don’t agree with them who want the status quo to continue as long they enjoy their fishbowl lifestyles) but to think straight now. Enough of curve balls.
A version of the article appeared last month in Al-Bilad Daily English, Jeddah.
(The writer is a business consultant, analyst and Editor-in-Chief of PKonweb and DesPardes–presently based in Islamabad)