The caretaker Governments

The general perception was that the caretaker setup, which is entrusted with the governance of the state for an interim period will do much good for the state in its pretty short tenure. This optimism emanates from expectations that the caretakers are the best of the best professionals in their respective fields and on the strength of which will make transparent the weaknesses and gaps in the system, put in recommendations for the incoming government which will need time to settle in and above all effectively and proactively address issues of immediate national and people’s interest.

None of these happened with the incumbent caretakers at the national or provincial level. What however did happen was that the caretakers did clean up some of the leftovers by the previous governments, significant of which was the two-time devaluation of rupee against dollar and increase in petroleum prices on two different occasions.

The then Finance Minister Miftah Ismail is reported to have assured the nation on the eve of his departure that there will be no further devaluation of rupee. These two drastic changes in a pretty short time adversely affecting the state economy and its people are unprecedented in the history of Pakistan and the region. This warranted a better explanation by the state leadership to arrest panic and uncertainty than opting to maintain undesirable silence.

The caretaker government ruled out the possibility of talks with the International Monetary Fund (IMF) for a bailout programme despite admitting that Pakistan may face difficulties in meeting its international debt obligations due to mounting external sector challenges.

Caretaker Finance Minister Dr Shamshad Akhtar announced that she had deferred the plan of holding Article-IV mandatory consultations with the IMF, leaving the issue for the next government.

She dissociated herself from a statement issued by the finance ministry two days ago that talked about tentatively holding Article-IV talks by the end of June. She also hinted at further currency depreciation and increase in petroleum products prices. These two measures will stoke inflation and make production processes expensive without achieving the objective of restoring macroeconomic stability.

She said foreign currency reserves, currently at just $10 billion, would further deplete and budget deficit would remain far higher than Rs 2 trillion this year.

The economic wizards of the country, prominently, Dr Salman Shah and Dr Ashfaque Hassan Khan expressed their concerns on the status quo maintained by the government at this critical juncture and its long-term consequences on account of this lapse.

Piqued by the situation, Dr Ishrat Husain, a former State Bank Governor, is reported to have suggested that the system of caretaker setup, which oversees holding of elections in Pakistan, should be abolished. According to him, the powers of the caretaker government should be given to the Election Commission of Pakistan.

“Strengthening the economy will be the first and biggest challenge for the new government,” he said while speaking to a TV channel Dr Ishrat has stressed the need for ensuring consistency in government policies for the sake of stability and a long-lasting development. He believes that “only democratic governments can ensure development, but only through consistency and durable policies.”

About the current state of the economy and the claims of the outgoing government, Dr Husain is reported to have said “Pakistan’s current economic conditions are worse than those in 2016.”

The main disappointment in the state governance chain is the passive and non-committed conduct of the bureaucracy. It is the federal secretary of the ministry who is the Chief Executive Officer of the ministry, entrusted under the constitution, to strategies and implement all deeds which are necessary in the best interest of the nation. The same holds true for the provincial governments.

The once professional and independent cadre of the civil service of Pakistan, which in a democratic system of governance is the backbone of the state machinery has, by and large, succumbed to years of political influence and interference and forfeited its proactive leadership and independence to political leadership.

It will not be before September 2018 that the new government will settle in to effectively take stock of the challenges. This means a status quo of three months translating into consequences of negotiations with lenders in panic and from a position of weakness. This situation could have been avoided if the caretakers had gone beyond ‘watch and wait’ policy of interim state governance.