In pursuit of 'Naya Pakistan'
Imran Khan's first speech to the nation after taking office as Pakistan's prime minister was impressive in its range of reforming ambition. Government spending would be cut but an Islamic welfare state with Scandinavian characteristics would be created. Governance would be devolved and strengthened from the bottom up, corruption must be curbed, meritocracy would replace corruption and clientelism. He appealed to fellow citizens to pay their taxes to help him tackle the massive deficiencies of the education and health sectors and eliminate water scarcity. The Quran provided goals: equality before the law, compassion, merit and education.
This vision of a renewed Pakistan is certainly one for which many of Pakistan's 200 million people have been waiting. Imran Khan's offer of sincere new leadership was directed to the common man, frustrated with Pakistan's many problems. It seems especially to have enthused many young voters. The surge of support was enough to raise the representation of his small PTI party beyond that of the established PPP and PML-N built by the Sharif and Bhutto political dynasties. Not, however, by enough to give the PTI a majority in the legislature without the adhesion of some smaller groups.
As signs of intent, Imran's first cabinet meeting set up a task force to fight corruption. He himself drastically cut his prime ministerial pool of official limousines and staff. A reformed police model developed in his own frontier region of Khyber-Pakhtunkhwa was suggested for the Punjab.
Almost immediately sceptical press comment pointed to a more sombre reality. Was a new Pakistan really feasible, particularly in a four-year mandate and without even a solid majority?
The PPP and PML-N are at loggerheads and therefore not likely to unite against the new government. Bilawal Bhutto is young and inexperienced as a PPP leader and the Sharif brothers, leaders of the PML-N, are shackled by corruption charges. Nevertheless, the PPP still dominates in Sindh and the PML-N in Punjab. The PTI's own Khyber-Pakhtunkhwa in the north-west cannot compete with those core centres of Pakistan's wealth and population.
Apart from the limitations of this political scenario, how far can determined and sincere leadership make headway against the massive vested interests defending the status quo? The security services and large army have long constituted almost a parallel government. In General Bajwa they have a commander quite prepared to make his views powerfully known and many believe that Imran Khan could not have won the election without army support. Generally, Pakistan's society is marked by extreme inequality of wealth and power. It is dominated by sophisticated elites, many with great land holdings and with almost feudal local power. Elite intellectuals realise the need for substantial changes, but many more will resist any reforms which challenge their position.
Even if he can find and appoint dedicated heads of leading ministries and institutions, including the police, reforming the bureaucracy and eradicating corruption will be a near insuperable task. Imran spoke of recreating lost 1960 administration standards of civil service morale, service and efficiency!
The great mass of the population is poor, young and either poorly educated or illiterate. They have the most to gain from social reform. Yet many are socially conservative and suspicious of modernising change seen as aping western values. Violent Islamist extremism also remains a threat, despite big army drives against it in recent years.
Even as the government takes office, it immediately faces the very urgent pressure of Pakistan's economic and financial crisis. Even with aid offered by the Islamic Development Bank, the seeming impossibility of meeting Pakistan's urgent financial needs leaves Imran with no obvious alternative but, like many previous Pakistan governments, having recourse to the IMF. Yet this would bring the political risk of alienating many of the new government's supporters. An IMF directed programme would include drastic spending cuts and politically painful reforms.
The economy has recently grown by 5.4 percent, which sounds impressive, but only at the cost of sharp and unsustainable debt. Pakistan's current account deficit has risen by 40 percent in just one year and now amounts to 6 percent of total GDP. Foreign exchange reserves have shrunk dangerously and cannot meet debt repayments. It does not help that President Trump has cancelled USD 300 million coalition supply funds to Pakistan and threatens to suspend military aid.
Exports have fallen well behind sharply rising imports, especially from capital equipment and coal for 21 power projects under the China-Pakistan Economic Cooperation (CPEC). These, funded by a mixture of debt and equity, are guaranteed by government but are not included in the official external debt of more than USD 90 billion. More electrical power and infrastructure is certainly needed and only China seems ready to supply the capital required. There is however concern that financial details of the Chinese CPEC commitment of USD 35 billion (with talk of extension to USD 50 billion) are not revealed. Projects are primarily funded by loans, often at high rates of interest, with only minor elements of grant aid.
Meagre foreign direct investment and reliance on Chinese and IMF loans has fed a habit of low industrial risk investment by Pakistan's corporate sector. Many enjoy tax exemptions and profits are often effectively guaranteed by government, regardless of performance. No wonder competitiveness and export performance have remained weak.
This is a daunting financial immediate crisis, even before the challenge of creating “Naya Pakistan” and the tangled relations with Pakistan's neighbours. It is at least encouraging that both Imran Khan and General Bajwa say they should improve.
Much now depends on the prime minister's key appointments. How far can he avoid being forced into political deals? How well can he and a new team communicate a sustained sincere effort and begin to demonstrate enough partial success to sustain hope and support? Pakistan is in a mess, but it has great patriotism and human potential. Also, can China afford to allow Pakistan to fail?
We should wish Imran Khan well. Pakistan needs a fresh effort. Our whole region could benefit from its progress.
Selina Mohsin is a former ambassador.