Economic facts vs political fiction

Facts speak, and they speak louder than what we say. Slogans and Speeches are the advertising tools for political selling but Economic facts are the core product that eventually determines long-term voter loyalty. However political loyalties compared to product loyalties are more long term, more difficult to obtain and more difficult to change. As Elections 2018 approach in Pakistan, the season for slogans and promises has started. The ruling PML-N is claiming they have transformed Pakistan and delivered on their promises and the opposition is claiming the exact opposite. So where does the truth “lie”? A more authentic way would be to examine some hardcore facts and then deduce some conclusions.

PRIME, ie, Policy Research Institute of Market Economy is a public policy think tank, based in Islamabad that carries out studies and analyses of economic performance of the government vs their manifestos. Their regular publication Government Policy Scorecard measures the status of implementation on governmental economic goals contained within the official economic agenda of the current government ie, PML-N in three areas, ie, policy developments, institutional reforms, and implementation. Their latest report that analyses the four-year performance of PML-N presents a dismal picture of government performance against their promises and claims.

The study clearly shows that not only PMLN has not been able to live up to its manifesto claims but many macro indicators have worsened in comparison to 2013 the year they came into the government. GDP growth rate has been an exception as it has increased from 3.7% in 2013 to 5.3% in 2017 though nowhere near their manifesto claim of 6.5%. Tax to GDP ratio has slipped from 60% to 58%, foreign currency reserves have deteriorated from $19 billion in 2013 to $13 billion in 2017, external debt has increased from $ 61 billion to 83 billion. These are serious negative trends that are going to hurt the growth of the economy in the long term. What has already affected the economy in a brutal way is the falling exports that have decreased from $ 24.5 billion in 2013 to $ 20.4 billion in 2017 resulting in historic trade deficit spike, ie, from $ 2.4 billion in 2013 to $12.1 billion in 2017.

While these are established facts taken from the government’s own data, PML-N denies their own published figures by claiming that Pakistan is well and truly on its way to development. This denial is backed by heavy advertisements in media that present a picture not corroborating the data that the government has published. While advertising generally has an allowance of puffery and exaggeration, false claims are heavily fined in more developed countries where not only the voter is more aware but many non-governmental organisations take on the government claims and educate the voter on the real picture. The blunder of a false or misleading advertisement claim can cost organisations and politicians not only heavy financial repercussions but their credibility resulting in social boycotts etc. In Pakistan due to low rate of literacy of the voter and few organisations working on educating the voter political sloganeering is rarely tested.

The macroeconomic facts are disturbing, however, even more troubling is the PRIME report analysis on the lack of reforms in the four years of government. All major reform areas like state-owned enterprises reforms, tax reforms, energy reforms, are not even on the parliament table either in the upper or lower house. Thus, state-owned enterprises are not just white elephants now but have become black dinosaurs. Neither have they been restructured nor have they been privatised. Taxation measures have been counterproductive. New taxes and duties have been imposed but to the same old tax filers who according to their own data are less than a million in a population of 200 million. The promise of tax broadening has had a reverse impact as far as direct taxes are concerned thereby putting the burden on indirect regressive taxes that are paid by the masses while paying for utilities and consumption items.

Energy reforms have also taken a back seat. Though coal power plants have been established, hydro power plants have neither been planned nor facilitated in the provinces. Solar power projects were initiated according to the plan but unfortunately as energy reforms did not take place the Quaid e Azam solar power project turned out to be a financial and operational disaster and according to last reports was being sold out to some private company.

The interesting part of this report is that it not only talks about quantitative economic facts but also accounts for qualitative aspects of the style of governance relating to government expenditures and decision making process etc. The big promise of eliminating the VIP culture and carrying out an austerity drive has been zilch and the report says if anything it has increased. Similarly, the autonomous decision making has been a big failure as regulatory institutions like NEPRA, OGRA etc instead of being further empowered have been further centralized.

Roots bring fruits. If roots are infested, fruits will rot and decay. This natural law is what glossy full page Ads will only cover up the reality temporarily. Investing in the roots means first reforming the mindset of command and control governance style to a more inclusive style of governance. Democracy is way of thinking and no matter what structure and system are put into place if the mind is programmed to be non-inclusive most systems will become irrelevant. The four years of government of PMLN are replete with scant regard to parliamentary norms, laws, and even orders of the court. It is this selective use of democracy that has created the current economic and political chaos. However, the silver lining is that through media, especially the social media, the understanding of what real democracy is all about has significantly increased. As the public becomes aware and is able to decipher between the difference between history, story and reality the ruling parties will be forced to walk the talk.

(The writer is a columnist, consultant, coach, and an analyst and can be reached at andleeb.abbas1@gmail,com. She tweets at @AndleebAbbas. The views expressed in this article are not necessarily those of the newspaper)