Economy, one year on
ONE year into its term in power, and the PTI government has much to answer for. Take the management of the economy. There is little doubt that the new government that took power after the July 2018 elections inherited an economy with severe stresses that had to be addressed rapidly and decisively as they were propelling the country towards a balance-of-payments crisis. At the heart of it were the rapidly depleting foreign exchange reserves that at one point fell to a level barely sufficient to cover a month’s worth of imports. If that level had continued to drop, Pakistan would have entered a financial crisis of the sort that we saw in 1998 and in 2008. Averting the slide was the top priority as was bringing the fiscal deficit under control. The deficit was touching 6.5pc of GDP, pushing government debt up, and complicating the effort to build up reserves.
This was a very serious situation, undoubtedly, and left to itself, the country was drifting dangerously close towards a crisis point. The government’s response took long to take shape, giving rise to protracted uncertainty. There was resort to emergency financing measures worth just over $7bn from countries including Saudi Arabia, the UAE and China. On almost all fronts it seemed as if the government was in a state of policy paralysis, with the circular debt continuing to rise, the stock market plummeting, the debt markets frozen, CPEC in limbo, key decisions on more LNG terminals left dangling, revenue collection falling to historic lows — despite two mini budgets, no major legislation on any subject, and so on. Meanwhile, the government’s indebtedness shot up and net reserves plummeted to negative $16.8bn by May 2019, despite the emergency support provided by Saudi Arabia, the UAE and China.
Given the numbers, it is not possible to argue that the delay in formulating a robust policy direction was in any way beneficial to the economy. Ultimately, the decisive step of removing the PTI’s core point man on the economy was taken in order to put policymaking on stronger rails. Nevertheless, many have questioned the appointment of Hafeez Shaikh as finance adviser to the prime minister, arguing that he represents the thinking of ‘purana’ and not ‘naya’ Pakistan. Aside from a ferocious macroeconomic adjustment, the budget brought no new ideas. The result is now there for all to see — skyrocketing inflation, rising unemployment and collapsing investment and growth. Meanwhile, the economic managers are averse to disclosing the reality and continue to insist that things are moving in the right direction. It took one whole year for the PTI government to find its feet amid a sinking economy. In the year ahead, it must find the rest of its body too, and realise that running the economy requires more than slogans and loud claims.
IS in Afghanistan
BACK-TO-BACK acts of terrorism in Afghanistan once again highlight the treacherous road that lies ahead in the war-wracked country’s quest for peace. Multiple bombings struck markets and public squares in Jalalabad on Monday, causing dozens of casualties. No one had claimed responsibility until the time of writing. On Saturday, a suicide bomber found his way into a wedding hall in Kabul packed with guests, mainly from the Shia Hazara community. In an instant, a joyous occasion became the scene of carnage: over 60 people were killed and more than 180 injured. The Afghan Taliban, who are in the midst of negotiating an agreement with the US, denounced the attack, which was claimed by the militant Islamic State group. In the chronology of horror unleashed by IS, any place where men, women and children can be found going about their daily lives — markets, educational institutes, hospitals, mosques, etc — constitutes a legitimate target.
Aside from the fact that bringing an end to this protracted war is desirable in itself, the urgency of doing so is compounded by IS ambitions in Afghanistan which are aided by a situation where various power centres remain in a state of flux. The extremist group, relieved of the financial demands involved in administering and defending its so-called caliphate in Syria and Iraq, sees Afghanistan as a potential base to attract foreign fighters. It has even managed to attract some Taliban elements who were unhappy with their leadership’s talks with the US or were drawn to IS’s more extreme, transnational ideology. Facilitated by assets of around $300m it is believed to still possess, IS now has a presence in four eastern provinces: Nangarhar, Nuristan, Kunar and Laghman. The region comprises rugged terrain with high-altitude posts from where, as the US troops found when fighting the Taliban forces, it is fiendishly difficult to dislodge combatants. For Pakistan, this constitutes a menacing development, as three of the four provinces where IS has found a foothold are contiguous with its western border. This country has already experienced the outcome of a nexus between the terror outfit and its homegrown violent extremists. When militancy was at its peak in Pakistan, groups such as the Lashkar-i-Jhangvi as well as several TTP factions had pledged allegiance to IS and jointly carried out several attacks. It is critical that the situation on the ground not allow old links to be revived and facilitate a resurgence of militancy.
“MEN, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one,” a Scottish journalist wrote in the 19th century. In modern-day South Asia, we have witnessed the insanity of the herd, time and again, whenever it rears its ugly head. In the most recent instance, a 16-year-old child, accused of stealing, was beaten to death by a mob in Karachi’s Bahadurabad neighbourhood. He was stripped off his clothes and had his entire ordeal filmed on camera. This was not the first episode of its kind, and it is unlikely to be the last either. Who can forget the public killing in 2010 of two young brothers, Mughees and Muneeb, lynched on the streets of Sialkot with the police urging on the mob, while a crowd of spectators watched? Or the lynching of a Christian couple, Shama and Shehzad, accused of blasphemy by rabid villagers in Kot Radha Kishan, in 2014? Or the murder of Mashal Khan — a bright, young man full of promise — by his fellow students at Mardan University in 2017?
When face to face with an enraged mass, individuals stand little chance of survival, let alone of getting justice. The names and locations of the victims may change, but what all these incidents point to is the brutalisation of society and a seething anger and frustration in the public psyche exacerbated by the steady erosion of its faith in the state’s justice system. But that is no excuse for the violence perpetrated by the collective against vulnerable others, and that too on the mere basis of accusation. Perpetrators of this recent act of violence in Karachi have been booked under the Anti-Terrorism Act, which some argue is not the appropriate definition for the crime. Nevertheless, those who take the law into their own hands to brutalise others deserve harsh punishment to make it clear there is no place for mob ‘justice’ in civilised societies.