This happens when folks in positions of authority only look at the "growth" numbers and ignore the details of how those numbers were achieved and the longer term ramifications.
Good interview but why were all these great ideas not implemented when Miftah et-al and PML were running the show? Sartaj Aziz was doing exactly the same things as he is faulting now for the cyclical boom/bust situation with the economy then.
This a good suggestion used in other Asian countries. But why did PML not implement this concept....they are clearly aware of it.
Dar was responsible for keeping PKR overvalued, not him (under him PKR was allowed to devalue in fact, do check). He was sworn in as the finance minister in the last year. Can't expect him to undo the incremental damage of 4 Dar years. Regardless, this interview was shared not for any political value but rather the discussion on what afflicts the Pakistani economy, how an ex-FM sees these afflictions, and dissection of the solutions he puts forth.Miftah Ismael? Oh please
Stop being in love with PMLN who destroyed Pakistan's economy View attachment 812007
Miftah Ismael was finance minister in the previous govt of PMLN. If he had any solutions, Pakistan would not have gone nearly bankrupt when his govt ended its term View attachment 812008View attachment 812009
Why did he defend Dar's policies in the interview?
Precisely, ideas like these shared through the course of this interview were why I shared it so we can have a discussion on these ideas. Miftah was sworn in in the last year of the PML govt as the FM. PML under Sharifs is like a family business. Dar and Sharifs have familial links (Sharif's granddaughter is dar's daughter-in-law). One cannot stand up to these fellows. Miftah only got the op[portunity when these crooks were out of the picture. In the last PML year, exports did see a small revival. Devaluation could be the cause and so could the availability of power.
You might be onto something here. When in power desire meets the realities of a rentier political economy. The only solution to that conundrum is the charter of the economy as I have mentioned above. A political government will always be forced to look at ways to get through an electoral cycle while keeping as many ppl/interest groups happy as possible. It would not try to upend the status quo if it can extract some cheap growth (regardless of its sustainability). It knows that if it does try to attack the status quo, its political flank would be exposed. Case in point PML N's attempt at bringing the trader class into the tax net and the resultant mass protests in the heartland of Punjab with calls to the military to intervene or PPP's aborted VAT regime. What you need to untie the hands of governments is a broad-based consensus on how the economy is to be run regardless of who is in power. This would need not only political players but the judicial representatives and the establishment to sit at one table as well to hash out the details. Otherwise, one disgruntled group is all it takes for extra-constitutional forces to use for the furtherance of their influence in this country. All must agree that no disgruntled group would enjoy their support when the stick of reform strikes at privileges.
Exports did rebound in the only year Miftah was FM. Do look at the data. He also undid Dar's policy of keeping PKR overvalued. PS. we would again be going to IMF when this program ends. Even the current dispensation has not been able to change the fundamentals.
I have argued this on this forum some time. Elected politicians can not be trusted to make sound economic decisions that have longer term benefits since they only care about short term perceptions while they are in charge. SBP needs to be independent. COAS and security establishment should also be focused on sustainable economic development since this is part of the strategic battlespace and an area where our enemies are trying to press us.
They can make these policies provided there is broad-based consensus. Right now, there are too many spoilers in the system (judicial, military, religious, political) who capitalize on the disgruntlement of elements whose privileges come under the scalpel of reform. What is needed is a whole of nation approach where consensus emerges on economic policies and that nobody on the table would try to exploit the disgruntlement of elements hit directly by reforms to undermine the government of the day.
Any political government will never disturb the cart in our political economy. A broad-based consensus on how the economy would be run and commitment from all political, judicial, and military establishment stakeholders is necessary for any elected government of the day to undertake the much-needed reforms that are keeping our economic potential bottled up. No government would allow its political flank to be exposed in an environment of insecurity where various parliamentary and extra-parliamentary actors capitalize on disgruntlement with the government of the day of the elements whose privileges are under the threat of being cut to size.
Any elected government in our political economy would concern itself with generating consumption-led bubbles of unsustainable growth that are enough to get it through to the next election. The problem does not appear to be incapacity or lack of recognition of the real problems marring Pakistani political classes as could be learned from this interview. In my assessment, it lies in the risk of getting one's political flank exposed by disturbing the status quo by actually trying to fix the country. A charter of economy is the salvation that brings all constitutional and extra-constitutional players on a single page and defines how the economy of the country would be managed. Any political government of the day could then freely take on the challenges without fearing the political blowback which would be used by state actors or other political groups inside the country. Without a broad-based consensus, no one would try to disturb the cart.
Miftah Ismail quoted South Korea and its development. Hopefully history wasn't lost on him that all of the reforms and the foundations for SK's growth were laid by a military strong-man. There was no "electoral cycle" to worry about thus things took hold and the country took off.
He did note that grudgingly about SK. The point about the electoral cycle was not made by him. His idea is something that has not been tried before. Import quotas linked to exports is something that could actually work and push manufacturers to begin churning exports rather than seeking rent from the state for developing substandard products that get dumped into the local market and in order to jack up growth, you have to fuel consumption so the industrial output swells to meet increasing demand.
