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Daily Times Editorials – 22nd May 2016

Pakistan’s economy

For a political party that considers economic development as its raison d’être, failure to meet its goal of attaining 5.5 percent gross domestic product (GDP) growth rate is cause for embarrassment. The Pakistan Muslim League-Nawaz (PML-N) was able to steer the government into attaining a GDP rate of 4.7 percent, which although higher than the previous GDP rate is still low. However, things are not as discouraging as they first appear to be as the industrial sector displayed a marked increase, with the growth rate being 6.8 percent while the services sector also showed modest improvement. The low GDP growth rate was the result of negative growth rate of 0.19 percent by the agriculture sector. While it is true that agriculture constitutes a significant part of Pakistan’s economy and negative growth rate in the sector must be addressed, however, a holistic appraisal of the economy would reveal that high rate of growth in the manufacturing sector is welcome news.

The industrial sector growth rate was largely due to the investment and development that took place in the construction industry and the power sector. The PML-N government is often criticised about prioritising construction of roads and elaborate infrastructure at the cost of development of health and education facilities. While there may be some weight behind these claims, it must be realised that health and education investment is not the panacea for Pakistan’s economic ills. Economic development requires adequate infrastructure to support it, and the PML-N government seems adamant on following this prescription. For most of Pakistan’s history, there have been low domestic savings but substantial foreign aid has found its way into Pakistan, and this has helped maintain a decent GDP growth rate. However, this foreign aid has been unable to address the underlying structural deficiencies, which have largely been responsible for Pakistan’s economic development. While it is true that the PML-N government is not exactly addressing all of these issues, it is still investing in infrastructure development and power generation, two of the main structural issues.

Pakistan’s power shortage is unequivocally the single biggest impediment to development in the recent past. Not only has it given great distress to the public, but it has also stagnated industrial development. Long hours of load shedding have made Pakistani exports, especially textile products, uncompetitive in the international market. It has increased costs by making the industrial units unproductive by decreasing their efficiency and forcing them to look for expensive alternatives for power provision. The PML-N government inherited this abysmal state of affairs, and the fact that it prioritised power production and managed to increase industrial growth rate is indeed laudable.

However, government should take note of the negative development in the agriculture sector. A great part of the labour force is still employed in agriculture, and in addition to providing them with means of livelihood, growth in the agriculture sector also keeps grain prices low and in turn keeps poverty in check. This does not mean that agriculture should be advanced at the cost of industrial sector. Pakistan’s economy is moving forward, and massive urbanisation has put great strain on the country’s major cities. This fast rate of urbanisation needs to be buttressed by industrial development if unemployment and poverty are to be effectively tackled. Hence, Pakistan is on the right track and it should continue developing the industrial sector.

Pak-US relations hits another low

The attitude of the US Congress towards Pakistan is toughening up. After the heated exchanges on F-16 fighter jets issue, the 602 billion dollar National Defence Authorisation Act 2017 (NDAA), which seeks to increase restrictions on military aid to Pakistan unless certain conditions are met, has been passed by the US House of Representatives with a majority vote. The bill has been adopted after the House Representatives were frustrated over Islamabad’s failure to crack down on the Haqqani network. The NDAA will block 450 million dollars in aid to Islamabad unless it does more to fight the militant group, which the US sees as a significant threat to its forces in Afghanistan. The bill threatens to block military aid to Pakistan unless the prescribed conditions are met. The bill requires the Pentagon to certify that Pakistan is conducting military operations to disrupt the Haqqani network, not letting them use Pakistani territory as a haven and actively coordinating with the Afghan government to fight the network along their border. Furthermore, three amendments related to Pakistan were also added and passed by a unanimous voice vote, while finalising the 2017 version of the annual bill. First is a certification of the US administration that Pakistan has shown progress in arresting and prosecuting the Haqqani network leadership. Second one requires a certification of the Secretary of Defence that Pakistan is not using the US aid or weapons for persecution of minorities, and third relates to the release of Shakil Afridi from prison.

Although the House version of the NDAA is not the final text of the legislation as it must be combined with a Senate bill before being sent to the White House for President Obama’s approval, Pakistan doesn’t have a favourable position in the Senate either. This month, Senator Bob Corker, Chairman of the Foreign Relations Committee, used his authority to bar the release of any US funds for Pakistan to buy American F-16 fighter jets.

In light of these developments, Pakistan finds itself in an awkward situation. Islamabad says that it is doing everything to bring the Haqqani network and the Taliban to the negotiating table. Pakistan has maintained that it cannot engage in a fight as well as persuade the militant groups to come to the negotiating table. Despite this, the US authorities have asked Islamabad to do more. In the wake of recent exchanges between the two countries on F-16 fighter jets deal, Pakistan needs to tread wisely as it cannot afford to sever ties with the US. Being a major regional player in the peace process in Afghanistan, the US must realise the ramifications of severing of relations with Pakistan. Although there have been accusations from the Pentagon that militant networks are operating from the Pakistani side of the border, the US must take into account all aspects that could affect the regional peace. Pakistan is involved in a major offensive against terrorists in the tribal areas bordering Afghanistan. Without the US military aid the operation could have a toll on the country’s economy that has recently started to show signs of improvement after more than a decade. Pakistan should be sincere in the fight against terrorism and go against militants without any distinction of ‘good’ or ‘bad’ militants. As far as the issue of Afridi is concerned, it is the internal matter of Pakistan and its courts must decide his fate as maintained by Islamabad.

A much-needed census

The Upper House of parliament passing a resolution urging Federal government to comply with constitutional provision concerning Council of Common Interests (CCI) and ensure holding of population census before the next general elections needs to be welcomed. Almost all countries across the world regularly partake in collecting a ‘snapshot of their entire population’ so that broad specificities on national demography in conjunction with its social, economic and housing characteristics can be gathered. For a country that already suffers from an unchecked population growth, it is of utmost importance that Pakistan ascertains the rapid changes taking place in its working-age population. The much-needed exercise is likely to have profound implications both for the distribution of federal resources as well as the allocation of legislative power in the National Assembly. The last census was held in 1998 during the regime of Prime Minister Nawaz Sharif. Pakistan was due to conduct a census in 2008 and 2010 but political unrest, conflict and natural disasters contributed to delays. The non-availability of required armed forces personnel in the wake of the Operation Zarb-e-Azb is also being speculated as a key obstacle in census collection. Federal administration should have addressed these concerns directly instead of delaying the much-needed practice.

For every modern country, a population census carries great importance because the entire planning for development, allocation of resources and formulation of policies to cater for different needs of citizens hinge upon the data collected through this exercise. It should be held once every 10 years but in Pakistan all planning over the last 18 years has been done without knowledge about the actual number of citizens. It is also necessary because the representation of the provinces in the National Assembly is decided on the basis of population, and it is also helpful in the determination of provincial shares in the federal tax revenue. A national census will give a comprehensive picture of the social and living conditions of our people. An accurate census is in everyone’s interest as it provides the data that allows public resources to be shared equitably across the country and to ensure that services at local level are relevant to all the people who live there. A reliable census is important for Pakistan to adequately plan growth, deliver services and solve the country’s problems. It is a welcome move by the Senate that will reveal different needs of the country according to the population and help in decision-making regarding allocation of resources. Although it is being done late, yet the process must be completed in time for fair allocation of resources.

It is hoped that government soon finds a formula that resonates with both the logistics of the project as well as concerns raised by legislators so that state projects can finally make use of official statistics in place of the existing estimations.

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