Economy

A charter of economy – Newspaper

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THE only thing there seems to be a consensus on at the moment is that there is a dire need for a consensus on the economy. Various governments have floated the proposal over the years for a ‘charter of economy’ type of document that encapsulates the major parties’ views and provides a minimum common agenda for all. In the past, the PML-N floated the idea while it was in power, then the PTI raised the matter again after it won the elections, and now the Senate deputy chairman, Saleem Mandviwalla of the PPP, has again suggested the need for such an understanding while delivering a talk at the Lahore Chamber of Commerce and Industry. There are good reasons to support the proposal, especially given how policy reversals by successive governments have marred Pakistan’s economic management over the years. Most damaging perhaps are those policies that everyone has opposed while out of power but found themselves constrained to follow once in government, such as entering into IMF programmes.

The understanding to be reached need not be worked out in minute detail. It is enough for the parties to get together in a closed room, leaving the din of politics aside for a moment, and agree on what is to be done regarding the state-owned enterprises, the rigid revenue base of the government, broadening of the export base and exchange rate management. Of course, this is not an exhaustive list, but it is enough at this point in time for agreement on a common direction. Perhaps, the parties could agree that they will not oppose privatisation plans in principle, provided these are executed with enough safeguards for workers’ rights, to take one example. They might also agree on the outlines of autonomy for the regulators, particularly the State Bank, which must be allowed to mediate between the markets and the government in curating its exchange rate regime and setting interest rates without political interference. Such a consensus is necessary if Pakistan is ever to embark on a course of deep-rooted reforms that lead to greater documentation of the economy and harness the productive potential of the country’s economy. But crafting such a consensus will take political skill, and perhaps put some limits on the divisive rhetoric that so poisons our politics these days. A little maturity and true leadership from the top will be required to make this happen.

Published in Dawn, February 11th, 2021

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