IT is certainly welcome news that the global credit rating agency — Moody’s Investors Service — has upgraded the outlook on Pakistan’s debt from negative to stable as an acknowledgement of the signs of strength returning to the external sector and the fiscal balance.
Soon the government will venture into the global markets to float a bond, and a stable outlook on its B3-rated debt will help. It is also a sign that the economy is stabilising and the narrowing of its two critical deficits is being acknowledged by foreign creditors and investors. In time, other rating agencies are expected to follow suit.
But it would be a mistake to hang too large a hat on this peg.
First, it is important to bear in mind that a ratings upgrade shortly after accession to an IMF programme is actually quite routine. Similar upgrades on the ratings outlook have been witnessed in the past — for instance, in 2001 after the Paris Club rescheduling that provided some breathing room on the external front, and then again in August 2009 when the country passed its IMF reviews and secured an augmentation of its quota.
Another upgrade came in July 2014, again in response to strengthening of the external liquidity position after accession to an IMF programme and the passage of successive reviews.
In each case, however, the ratings suffered a downgrade towards the end of that government’s tenure as the deficits reappeared, and foreign exchange reserves that had been built up through pain and sacrifice once again depleted.
The point here is to avoid a repeat of this story, where a government begins its term with an IMF programme, implementation begins, the deficits recede, ratings are upgraded — and then the path of reform is forgotten and the hard-won fruits of stabilisation squandered to produce one quick growth spurt.
An upgrade of the outlook on the ratings is fine, and certainly indicative of the return of health to the macroeconomic framework. Above all, it provides comfort to the foreign holders of Pakistan’s debt that the government is not likely to move towards a default or rescheduling in the next year.
It is not a triumph for the policymaker, and it certainly is not a moment to exalt and hail as a victory.
The real stakeholders in the country’s economy are the ordinary people, particularly the poor whose interests must be kept foremost in mind when making economic decisions. For them, and for local investors and businessmen, the ratings action is far too abstract a reality.
In a sense, it can be said that the ratings action represents a setting of the stage. As fiscal and external space becomes available, the real triumph will be in how it is utilised. If the government can put growth on a sustainable footing, that would be something truly worth celebrating.
IT is a matter of great shame that successive governments — federal, provincial or municipal — have, despite considerable financial help from foreign donors, failed to resolve transport problems in all major cities of the country. Be it Islamabad, Peshawar, Lahore or Karachi, all mass transit projects are being subjected to delays, while the residents of these cities continue to be inconvenienced for no fault of their own. A cursory glance at their progress is enough to reveal that these projects — even if the work is ‘almost’ complete — are delayed not so much by the dearth of funds and resources as by political point-scoring and the sheer incompetence of the ruling elite.
As one PTI-led government in KP scrambles to manage the disaster of the Peshawar BRT, the other in Punjab appears to be delaying the launch of the Rs200bn Orange Line Metro Train initiated by former chief minister Shahbaz Sharif. The bidding process for the maintenance and operation of the Orange Line was restarted in July by the current dispensation because the leadership was unsatisfied with the earlier effort. It is deplorable that the people of Lahore should continue to suffer because of political rivalry and the government’s tendency to tamper with flagship projects initiated by past dispensations. Meanwhile, there are bureaucratic delays in the completion of the Islamabad Metro Bus Project, where 90pc of the construction work has been done. The relevant authorities seem to be passing on responsibility to each other, while contractors have halted work due to the non-payment of dues. Then there is the largest city of the country, Karachi, where no mass transit project announced by the past few federal, provincial or municipal governments have come to fruition. The Sindh government recently shelved a proposed Blue Line bus project due to the paucity of funds while ongoing construction work on the federally funded Green Line seems to have been stalled as parts of the city centre remain dug up and are inaccessible to commuters. However, the incomplete projects notwithstanding, the provincial government plans to start work on yet another project — the Red Line — for which around $400m have been obtained from foreign donors. These mass transit projects were launched for the public, but their shambolic management have only added to commuters’ misery. If only the authorities focused more on providing relief to the people instead of political point-scoring, the country could witness positive change.
Disaster Down Under
ON all counts, the Pakistan cricket team’s tour of Australia was more of a case of professionals versus schoolboys.
The visitors were comprehensively out-batted and overwhelmingly out-bowled by the hosts. Pakistan was trounced by a team that was operating on a different level altogether. Not only were the Australians at their zenith in terms of performance, they also executed their game plan with utmost discipline.
Meanwhile, Pakistan lost back-to-back Tests at Brisbane and Adelaide that followed the comprehensive T20 drubbing. The absence of a strategy was evident throughout, starting from the unceremonious removal of Sarfraz Ahmed on the eve of the tour. He may not have fared well at the World Cup, but he is a better leader any day than the clueless Azhar Ali.
The PCB also blundered by putting all its eggs in Misbah-ul-Haq’s basket. With no prior experience, Misbah selected raw teenagers Naseem Shah and Moosa Khan to be the bowling spearheads, a move which hugely backfired. Inexplicably, Misbah left out experienced batters such as Fawad Alam, Sami Aslam and Abid Ali from the team and continued to back Haris Sohail and Iftikhar Ahmed for the Tests, both of whom were unable to survive the Australian onslaught.
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Pakistan’s dependence on leggie Yasir Shah must also end now and slow bowlers Mohammad Asghar, Umar Khan and others must be considered. Babar Azam’s exploits as a batsman of exceptional quality remained the only real high point. The brilliant right-hander was undaunted by the strength of the opposition. The same, however, could not be said of Pakistan’s other top order players Azhar, Asad Shafique, Imam-ul-haq and Shan Masud.
The PCB may be engrossed in preparations for the first home Test series in a decade, but it must realise that teams need to develop their players according to the challenges of the moment. The PCB should always keep in mind the importance of professionally grooming players, regardless of whether it’s a home series or an away tour. The game is more competitive now than ever before.