Is the worst over?
Friday, November 14, 2008
by Shafqat Mahmood
There is little doubt that we have been through a very bad period. If the economy is a barometer of a nation's health, nothing good has happened for the last many months. The stock market has been down, prices are up, and the currency has crashed with a rapidity that left even the pessimists dumbfounded. On top of that, in a country that exported wheat last year there has been a recurring atta shortage.
Situation on the security front has been no better. Full-scale battle has been on in Bajaur and Swat and even the environs of Peshawar have been under attack. Fighting around the road to Kohat has frequently closed the tunnel and places like Hangu are barely under control. In Parachinar, a full-scale sectarian civil war is on in which hundreds have been killed.
The political situation has also been volatile with the PML-N and the PPP drifting apart on the issue of judiciary's restoration. There is a strong sense of grievance on both sides with the PML-N accusing the PPP of betrayal and the PPP accusing the PML-N of opportunism. The situation in Punjab also nearly erupted into an open warfare thanks to the loud-mouthed Punjab governor and his impatient cronies hoping to take power in the province.
The governance side has also not been encouraging. Prime Minister Yousuf Raza Gilani seems to be out of his depth with little understanding of issues confronting the country. Ugly rumours of corruption have also started to circulate, further casting a dark shadow over a blundering effort by the government to pull the country together.
The only bright light was the provincial government in Punjab, where Shahbaz Sharif seems to be greeting the dawn everyday and burning the proverbial midnight oil. This provides some hope of better governance from the political class but one man's effort and that too at the provincial level cannot make up for the deficiency on a national scale.
Foreign policy has also been in shambles with our traditional friends China and Saudi Arabia deeply suspicious of Mr Zardari and unwilling to commit any serious assistance. The United States while professing friendship continues to bomb our territory giving little heed to protests by the Pakistani leadership. There are also straws in the wind that it had earlier stopped the World Bank to provide assistance and tried to dissuade other allies such as Britain to go easy on their aid commitments.
And, after years of gradual warmth in relations between India and Pakistan during the Musharraf period, there seems to be a serious cooling off. Both countries have again started to accuse each other of fomenting terrorism. This is just a brief stock-taking of what has been going on since the February election. And it is clear that in many areas little hope of change is visible. But, while doom and gloom is easy to indulge into, with a little effort it may be possible to see signs of hope. Some people might consider this incorrigible optimism but if there is positive movement in certain areas, it should be sought to relieve this heavy burden of despair.
Let us start with the economy. With the IMF programme on the anvil things are beginning to look better. There has been a raging debate in these pages regarding its utility. Scathing words have been used particularly by my friend Mosharraf Zaidi, but no one is pointing what alternative is available. The fact is that none of our traditional friends, and that includes China, are willing to give any money without the IMF package.
The reasons for this may be many but two stand out. One, they do not trust the government with their money. On a recent visit to China, I detected – and detection is the right word because Chinese are not prone to voicing their opinion openly – that they were very uncomfortable with the PPP regime headed by Mr Zardari. Why this is so is for the president to figure out. The situation is similar with the Saudis.
Secondly, all our potential donors think that we are incapable of spending our money wisely. In other words, they think we are profligate and they have every basis to worry. For this reason, they consider an IMF package with its stringent conditions a prerequisite before they help us out.
Already the possibility of an IMF rescue has started to have an impact. With the danger of a sovereign default receding, the rupee has begun to gain strength in the open market. While this is important, its greater benefit is likely to be a change in sentiment. Any economist will tell you that sentiment plays a very important role.
If confidence comes back and sentiment is bullish, it helps all kinds of markets but in particular the stock and real estate market. Already there are reports that some of the money that had fled to the Dubai real estate is beginning to come back. Stock market is in a bad shape but maybe the worst is over. Both these markets along with the currency value are an important barometer for a small economy such as ours. It is early days yet and no dramatic change is likely soon but after months, some hopeful signs on the economic front are visible.
The same cautious optimism can be expressed about the problem of militancy in the tribal areas and parts of NWFP. Our army, air force and the Frontier Corp seem to have turned the tide in these places. It is sad that we do not express enough praise and encouragement for our troops who are fighting a difficult battle courageously. Many brave sons of the soil have lost their lives.
Let me also say that while we are a long way from overcoming this problem – and fighting is not the only way to solve it – the performance of our armed forces has given us the breathing room to seek strategic solutions. It is now time for the political leadership both at the centre and more crucially in the province to use their public support to push for political solutions.
The third area of hope is the seeming reduction in the political polarisation that was beginning to reach dangerous proportions. The dinner meeting between President Zardari, Mian Nawaz Sharif and their families has helped to bring the temperature down. In Punjab too, Mr Zardari has done well to reign in Taseer and others among the impatient party faithful. The prospect of a workable coalition arrangement is now more possible than before.
It can all unravel very quickly because we are a volatile people; quick to anger and even quicker to take precipitate action. But, if the political class has any hope of remaining in power and by default strengthening at least the form of democracy, it has to behave maturely. It seems to be moving in that direction.
We are a long way from overcoming our troubles but we must rekindle hope. There are no perfect solutions in this world. We will not suddenly get a perfect leadership or a people that put country before everything. But, given a less than perfect framework, we may be beginning to move in the right direction. This makes one cautiously hope for a better future.