Dawn Editorial August 22, 2019

Restraining NAB

UNTIL now, the government had been in total denial that it had any control over NAB’s ‘anti-graft’ drive, which has created a culture of fear that many see as affecting the economy.
But at long last, it appears that the government is going to admit that it has some influence over the movement of the accountability bulldozer.
The federal cabinet has acknowledged the reality — though not in so many words — that the bureau’s campaign is crippling the economy, hampering investment and causing administrative inertia.
It is explained that following a recent discussion on allegations by businessmen about harassment by NAB, the cabinet has decided to ‘make some procedural changes’ in the bureau’s working to stop it from scaring and threatening investors.
The government has conceded that the business community is anxious because of the investigations launched by the bureau (into past contracts and deals between the government and private investors — local and foreign both).
Clearly, there is no spending or investment in the country to speak of, for which the prevalent ‘climate of fear and harassment’, has been repeatedly blamed.
As the economy gasps for fresh air, the anti-corruption agency hogs the headlines with its feats — mostly the sheer humiliation it heaps on opposition politicians or those businessmen and bureaucrats linked with them.
It seems anyone even remotely connected with these decided villains risks a probe by NAB.
There are also allegations that intense pressure was exerted on certain businessmen and bureaucrats to turn approver in corruption cases against opposition leaders.
The frequency of these allegations has led to calls for restraint, despite the large support for the anti-corruption drive in the country.
The bureau’s work in recent times has smacked of a selective campaign and political vendetta, jeopardising the fairness of the entire accountability process.
Steps such as the constitution of a debt commission comprising officials of the military intelligence agencies and NAB to investigate the projects and agreements that are believed to have led to the rapid accumulation of public debt since 2008 are being viewed suspiciously as a tool to be used against the government’s opponents.
The government is yet to make public the details of the actions it plans to implement in order to restrain NAB officials from harassing the business community and civil servants.
But it is clear that simple ‘procedural changes’ in the working of the bureau are not going to help restore business confidence or break the administrative inertia essential for economic recovery.
The NAB law requires a wholesale review by parliament to restrain it from opening an investigation without proper inquiry and sufficient grounds, and arresting suspects without hard evidence against them, as well as to bar it from encroaching on the territory of other state agencies with a similar mandate.
For this to happen, the Imran Khan administration must tone down its anti-corruption rhetoric and agree to sit down with the opposition.

 
 

Deficit declines

THE continuous declines being seen in the external-sector deficit of the country are perhaps a reason to believe that the economy is finding its equilibrium after years of ballooning deficits that have depleted the foreign currency reserves. The latest data released for the month of July shows an accelerating pace of contraction in the current account deficit, indicating that a trend that began earlier this year is finally gathering pace. The decline is sharp compared to the corresponding month last year. July this year saw a current account deficit of $579m whereas it was $2.13bn in July last year. This is a sharp and appreciable drop, and coming on the back of continuous declines since earlier this year, shows that the economy is indeed turning the corner after the unsustainable deficits it was saddled with when the PTI government began its term in office.
But there are grounds to be cautious about celebrating this outcome. For one, the State Bank’s latest quarterly report, which covers the period July to March of the previous fiscal year, notes an accelerating contraction of the current account deficit but attributes much of it to a decline in oil prices, contraction in imports of LNG, and tapering off of machinery imports as CPEC projects come to an end of their construction phase and begin commercial operations. A small part of the overall contraction in the third quarter of the last fiscal year was attributed to government policies, and even that part was possible mainly because the stabilisation policies adopted by the government caused a sharp and severe slowdown in the pace of economic activity. In short, contingent factors and collapsing demand explain the declining current account deficit until March, developments that are hardly worthy of celebration. And in that report, the State Bank was also careful to point out that despite the contractions, the current account deficit remains elevated, meaning further contraction will be necessary. We will have a clearer picture of what to make of the continuing declines in the deficit since March when the State Bank releases its next analysis for the period April to June. In the meantime, it is enough to say that the government’s policies have played a role in helping rein in a runaway external deficit, but this role has been helped in large part by global factors, a little luck, and significant strangulation of the economy.

 
 

‘Dirty’ politics

THE sanitary situation in Karachi is far from perfect. To put it mildly, Pakistan’s largest city and economic heart presents the picture of a giant garbage dump, with streets overflowing with sewage. In the aftermath of the recent rains and with the leftovers of the Eidul Azha sacrifice, the situation has worsened considerably, with mountains of trash spoiling the city and the sewage situation seemingly out of control. And, expectedly, instead of combining forces to tackle this grave situation head-on, the PPP-led Sindh government and the MQM-steered city administration have been indulging in an ugly blame game about who is responsible for the state of affairs in Karachi. To make things more interesting, the PTI-led federal government has also jumped into the fray, taking potshots at the Sindh administration for its lack of performance. However, a statement by the Karachi mayor on Tuesday, asking the people to stop paying taxes to the Sindh government, is ill-advised. While the mayor is understandably frustrated because the provincial government controls the Sindh solid waste management body, as well as the water board in Karachi, asking citizens to stop paying taxes is not the right way to lodge a protest. Imran Khan advocated similar tactics while the PTI was in the opposition; suffice to say, elected representatives should not be advocating such a course of action, considering the fact that already there are major issues with below-target tax collection in the country.
Interestingly, the federal government, aided by the MQM, has launched the Clean Karachi campaign to spruce up the city. Perhaps realising that this may make them look bad politically, the Sindh government has launched a Blue Jacket movement of its own to prevent littering. All these initiatives are fine, as long as they are not designed simply as political gimmicks. More than gimmickry, what Karachi really needs is an empowered local setup accountable to the people and that has the funds, manpower and mandate to keep the city clean.

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