The curious case of PTI's economic management.

Byline: Dr. Kamal Monnoo

On paper at least, the PTI has a reasonably good economic team headed by the Finance Minister Asad Omar himself, and ably supported by the experienced Razzaq Dawood and Dr. Ishrat Hussain, plus its thinking and heart seems to be in the right direction: job creation; investment; correction of twin deficits: current account and trade; working on ease of doing business, etc. So, the question that arises is that why isn't it delivering? Could it be that there is a contradiction between what it says and does or perhaps is it that it just suffers from a poor management approach to solve some complex and persistent economic problems ailing the Pakistani economy? Well, the answer is: A bit of both. Let's try and analyze where they could perhaps be going wrong.

To start with, from day one, one would have liked to see it unleash policies aimed at reducing the footprint of the government in the economy. A principal failure of the previous government was to crowd out the private sector and instead undertake most major projects in the public sector domain. All we need to do is to take a cursory look at our country's economic history cum track record to realize how inefficient users of capital have our state institutions been and it is evident that Pakistan today suffers from an absence of entrepreneurial management framework in its SOEs (State Owned Enterprises) sector. PTI seems to be falling in the same trap of expanding the governmental pot by announcing to undertake building 5 million houses at a cost of Rs1.50 million each and by keeping to borrowing excessively - 2.24 trillion rupees in its first 5 months and a continuous doling-out of funds to un-sustainable operations. Still missing are any real reforms aimed at: distancing the tax payer from the tax collector or reducing excessive and often counter-productive governmental oversight on businesses or tangibly reducing bureaucratic red tape in routine operational requirements or rebalancing the skewed business laws that give unnecessarily wide powers to the regulator - in short, all talk and no real action so far to help ease doing business in Pakistan. In the meantime, this confused signalling has neither helped the private sector nor the public sector - SOEs losses have since increased and today we see new champions-of-losers emerging in the shape of Discos that now lead the pack (eclipsing the past villains, PSL and PIA) in terms of state entities posting losses -...