THE new estimates for large-scale manufacturing production published by the Pakistan Bureau of Statistics support the government claims that the economy is returning to the path of recovery from the deep impact of the first wave of the Covid-19 health crisis. The data shows LSM grew by 11.4pc month on month in December and 8.16pc year on year in the first half of FY2021 from the same period in FY2020. Analysts expect LSM to expand much faster in the second half of this fiscal because of the lower base effect as industrial output had plummeted massively from March to June 2020 on the back of Covid lockdown restrictions and the cancellation or deferment of export orders due to closure of international borders. The Quantum Index of the LSM industry, or QIM, had plunged by 25pc during that period because of closure of factories in the country.
The industrial sector may be on its way to recovery compared to last year when millions lost their jobs and were pushed into poverty. But the recent revival of output in the industrial sector remains weak. The QIM at 167.2 in December 2020, for example, has yet to touch the peak of 170.2 reported in January 2018. Moreover, the rise in the QIM in recent months owes much to the lucrative tax amnesty and incentives for real estate investors and the early start of the sugar harvest. The early end of sugar crushing may affect the numbers in March. A look at the new data also shows that LSM recovery is not broad-based as much of the growth in production in recent months has come from sugar, steel, fertilisers, cement, cigarettes, automobiles and pharmaceuticals. The remaining industries have yet to post an increase in output, which is crucial to sustainable growth.
A cursory glance at PBS data for the last two years would show that the manufacturing output had started to contract long before the global pandemic hit the country last year. The QIM consistently plummeted till June 2020 from the January 2018 peak. Covid-19 infections only exacerbated the losses inflicted by harsh economic stabilisation policies that saw interest rates rise to 13.25pc and currency depreciate in a very short time. Reversal of these policies has been a major reason for the recent revival of the industrial sector as well as exports recovery in the current fiscal. However, the present recovery remains fragile and continues to be in need of policy support from the government as well as the State Bank. With the government all set to revive the suspended $6bn loan programme with the IMF, many fear that pressure from the lender may force it to scrap most of the business-friendly actions it has taken over the last several months. Does the government have a plan in place to counter the ensuing negative effects?
THE Senate elections have been embroiled in a bigger controversy than was required. At multiple levels there are complications unfolding on a daily basis that reflect badly on the system as a whole. While the ruling PTI has aggressively propagated an open ballot for the Senate elections, its subsequent actions have raised questions that go beyond the specifically legal ones. The awarding of tickets, and the disputes arising from this process, are a manifestation of the politics that underlie these Senate elections. In Balochistan for instance, the PTI announced a ticket for a person who was not even a member of the party. When questioned, party people tried to justify this decision by saying that he was a joint candidate for the PTI and its coalition partner BAP. However, after an outcry from the local rank and file of the party in the province, the PTI took back the ticket from him. He then decided to contest as an independent after which the BAP adopted him as a candidate, which essentially means that if he wins, he will still be allied with the PTI. The machinations involved in electoral calculations leave little space for attaining and sustaining the moral high ground.
The legal ground also seems fairly shaky. The Supreme Court is hearing the case regarding the mode of balloting for the Senate elections even though the Election Commission has stated categorically that it believes only a constitutional amendment can change the process to an open ballot election. However, during the hearing some honourable judges in their comments remarked that seats in the Senate for a party should proportionally align with the total strength of the party in the assemblies. In such a case would there be any need to hold elections? All parties could be allocated seats as per their strength in the electoral college and that would settle the issue. The whole purpose of holding an election, even an indirect one, is to enable the people’s representatives to use their judgement to make a choice that is not chained to their party position. These aspects of the issue would have come up in a debate if the matter had been processed through parliament. It may be prudent for all stakeholders to not rush to judgement on a matter that calls for deeper thinking and broader input. Democracy requires patience and due diligence to deliver even if urgency appears of utmost importance