When Nawaz Sharif won Pakistan’s historic May 12 general elections, he was well aware of the huge challenges that confronted his newly formed government.
His election manifesto focused on rejuvenation of a flagging economy, overcoming the crippling energy crisis and conducting local body elections across the country. Only the naïve would believe that these problems could be resolved overnight. Sustainable progress on these fronts required a well-coordinated state response and structural adjustments to Pakistan’s weak and corrupt governance system.
Soon after assuming reins of an economy in precarious condition, the government was able to negotiate a $6.8 billion with the IMF. The IMF has also acknowledged Pakistan’s commitment of making tough policy decisions to reshape the economy. It projects the country’s economic growth to fall slightly to 3.1 percent this year and then steadily increase to 5 percent by 2018. However, this growth remains conditional to the country’s energy and security challenges.
The government recognizes that it has failed to attract foreign investment in the manufacturing sector or made much development in improving the tax-GDP ratio. Much of the foreign investment has been attracted to Pakistan’s capital markets, which have ballooned to an all-time high. The government also recently completed sale of Eurobonds worth $2 billion in the global capital markets. Pakistan has been able to secure GSP Plus status for the country’s exports to lucrative European markets. As a result, exports are expected to boost by up to $2 billion. A youth loan scheme could provide an impetus to the economy by encouraging a culture of entrepreneurship and reducing unemployment.
The government has adopted a multi-pronged strategy to counter the menace of power crisis by focusing on improving the generation capacity and cutting down on line losses. Major initiatives such as Thar Coal and Dasu hydel power projects, and Bhasha dam, will increase the country’s power generation capacity in coming years and reduce reliance on expensive, imported furnace oil for power generation. In the early days of power, the government also stepped in to resolve the circular debt issue by pumping about $4.6 billion to ease the pressure on power sector companies and fuel importers.
However, it is still struggling to find a permanent solution to the problem, which is mounting again to choke the country’s power generation capacity. The authorities have also launched a massive, indiscriminate crackdown against defaulters of electricity bills. Ironically, government departments are among the top ones to be named and shamed under the recovery campaign.
Pakistan’s nascent democratic setup has survived against all odds amid allegations of massive rigging in general elections, frequent protests by opposition forces and occasional verbal skirmishes with the country’s mighty armed forces. However, democracy in its truest sense cannot flourish till the people are involved in decision-making through devolution of power to the grass-roots level. The Sharif-led government has failed to hold local government elections in all parts of the country, except for Balochistan. Provincial governments in Punjab, Sindh and Khyber Paktunkhwa have been clinging on to power and adopting delaying tactics with regards to these local elections. The elections have not been held in these regions on the pretext of delimitation of constituencies and changes to draft bills. As people have shown keen interest in these elections, this is where the federal government has disappointed them the most.
