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Pakistan Today Editorial – 14th May 2016

Fund’s good books

Another pat on the back

The finance minister had good reason to sport a big smile after the IMF meeting in Dubai. The Fund could not have been more appreciative while rounding up the Extended Fund Facility (EFF). But that would mean that either the IMF has suddenly, dramatically changed its performance-testing criteria or it might have some non-purely economic reasons for the pat on the back. This was the first time, after all, that Dar sb did not have to request a downward revision of practically all important indicators and targets. Also, while the macroeconomic stability cannot really be questioned technically, perhaps the Fund went a little too far about the ‘robust growth’. It could have looked around the region for a better understanding.

Also, it’s not quite clear what the donor meant by ‘challenging external environment’. The outside factor has, in fact, been quite favourable for much of the present cycle. If anything, it bears noting that the Brent collapse, and subsequent low inflation and billions in savings for the exchequer, still only managed 4.5 percent growth; not to mention a fragile deficit. That latter, too, was appreciated beyond merit. And if investment is actually ‘rising’, then why not mention much beyond CPEC?

Another thing the appraisal did not mention was the likely trend ahead. The ruling party has already gone into a premature election campaigning mode. That, by necessity, puts pressure on the kitty; and therefore on the deficit that, though ‘under control’, is by no means pretty. One reason donors like to wrap up programs like the Facility on a cheerful note is to increase chances of another in the near future. Once the election is over and the reserves in the red again, Islamabad will have little option but to return to the IMF. And then everyone can look forward to uplifting appraisals, etc. Meantime the ‘macroeconomic stability’ does nothing for real internal investment, savings, etc, and the ‘consolidation’ remains static.

After the CJ’s response

PM has much to think about

Two issues raised by the opposition have found their place in the CJ’s reply to prime minister’s letter seeking the formation of a judicial commission. The CJ too thinks that any commission appointed under the 1956 Act would be toothless and useless. It is therefore necessary to form the commission under a new legislation. The CJ also thinks that the ToRs of the commission proposed by the government are so “wide and open” that “it may take years” for the commission to conclude the proceedings. The third issue that needs to be decided according to the CJ is the list of the individuals, families, groups or companies that are to be probed in the inquiry.

Meanwhile, Leader of the Opposition in National Assembly Khursheed Shah has called upon the ruling party to jointly formulate the ToRs with the opposition through talks between their respective committees. He has also asked the prime minister to come to the National Assembly on Monday, promising that the opposition would observe parliamentary decorum during his presence. He has demanded a live broadcast of the session to allow the people to judge for themselves the cases presented respectively by the government and the opposition and the performance of their elected representatives. These are constructive proposals that should be accepted.

The entire political class is in the line of fire over accusations of getting itself enriched at the expense of the man in the street. Unless it makes genuine efforts to remove the blot on its reputation, it runs the risk of promoting cynicism and thus making people lose confidence in the system. While the government’s legal team examines the implications of the CJ’s letter, the ruling party has to realize that any attempt to bypass a fair enquiry would further divide the country and lead to confrontation. Nawaz Sharif has to play a leading role instead of leaving the matter to legal experts, bureaucrats and loyalists with little understanding of the implications of the issue confronting the government

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