Date: 06-07-2013

Tougher days: ahead IMF loan

THE government and the market are jubilant over the ‘successful conclusion’ of a new loan of $5.3bn from the IMF. And why not? The loan will ease pressure on diminishing foreign exchange stocks and relieve the government of worries of how to repay over the next 12 months what the country already owes to the Fund. But is it really a ‘step forward’ for the new government, which had promised voters so much? Although the announcement of the agreement on the loan hides more than it reveals, from whatever has so far been divulged it is clear the people should brace themselves for greater hardship. When Finance Minister Ishaq Dar said a “better tomorrow dawns only when the requisite pains are borne today”, he was signalling towards a tougher future for the people in whose name the loans are secured and who must repay these generosities with sacrifices.

The help from the IMF is necessary not only to repay its existing debt but also to obtain budgetary support from other multilateral lenders. However, the government has not lived up to its pledge of not accepting tough conditions, such as the ones which would raise the energy prices to prohibitive levels, stifle investment and fuel inflation. All the high talk that Mr Dar had indulged in over the last few days was little more than rhetoric to begin with. Some of the steps demanded by the IMF had already been incorporated in the bud-get — raising tax revenues (albeit through the old practice of burdening existing taxpayers), liquidation of the power-sector debt, etc. Others, like a hike in borrowing costs and increase in electricity and gas prices, have also been initiated and now the gap will have to be met before September when the Fund holds its meeting to give the final nod.

Still Mr Dar is not sure if the Fund will give him the additional $2bn — over and above the amount agreed on so far — he desperately needs to match the foreign exchange outflow. Nor is anyone certain if all the provinces —– especially Sindh and KP where the PML-N’s opponents rule — will agree to cut their expenditure to cut fiscal deficit to 6pc from the budgetary target of 6.3pc when the minister takes the agreement to the Council of Common Interest for broader political ownership, which is another condition for the loan. The IMF loan and support from the other lenders will provide only some breathing space for the government. It will have to take measures that hurt if it wants to fix the economy.


Quality needed: Pakistani missions
AS part of the government’s recently announced cost-cutting measures, the Foreign Office is set to pare down its international footprint with the closure of up to a fourth of the country’s present 70-odd missions across the world. Good idea or bad idea? The raw numbers can make a case either way. With fewer than 500 career officers and a staff complement that is roughly three times that size, the Foreign Office is not quite the overstaffed entity that other institutions have become. Then again, for a country with a small international economic footprint and a relatively narrow foreign policy, the case for consolidation can appear straightforward. For example, in Africa and Latin America the closure of a few outposts may be more than manageable if other missions regionally are made to pick up the slack.

Numbers alone, however, are a misleading yardstick. For one, it is not the size of the officer corps but its competence that matters more. The dozens of economic and commercial officers at Pakistani missions abroad, for example, may be a good idea in theory, but a performance evaluation may suggest that few economic benefits have accrued to Pakistan because of these posts. Merely stating that economic and trade dip-lomacy are priorities, as the newly installed government claims, without developing a coherent strategy and installing quality officers to implement it is largely meaningless. If across-the-board cuts have been mandated by the government, then the Foreign Office too must learn to tighten its belt. But within that paring back is an oppor-tunity to rethink how the Ministry of Foreign Affairs goes about its overall business. From recruiting a better quality of officer to ensuring adequate career opportunities and training to formulating policy that goes beyond the talking points dictated by GHQ, there is much room for improvement. Ultimately, though, it is the product itself, not just the image, that has to be fixed: if Pakistan is to be better regarded internationally, it will first have to put its own house in order.


Lack of perspective: Tirade against KP police
WHILE the political leadership’s dithering and mixed signals on the fight against terrorism has left confusion worse confounded, there is no retreat into the comfort of demurral for the law enforcement agencies on the frontline. The nature of their work — and the ruthlessness of their adversaries — makes it a battle starkly drawn in black and white, one in which their lives are at risk every hour, every day. The KP police are among the LEAs most directly impacted by the militancy raging in the tribal areas that abut the province and further north. Sixty-five policemen have been killed in the first six months of this year alone. The perils they contend with on a daily basis cannot be overstated. This is what makes the KP chief minister Pervez Khattak’s scathing denunciation of the force, that too at a public forum — a workshop organised by the police on thana culture — so perplexing and ill-advised. Granted, he acknowledged their sacrifices, and his criticism was specifically concerned with corruption in the force, but the vehemence of his tirade overshadowed his earlier positive observations regarding the police’s performance.

Aside from the fact that corruption in the force, while undeniably present, is widely held to be not as endemic as among police elsewhere in the country, the chief minister’s outburst betrays a lack of perspective in appreciating the crucial role played by the KP police as the first line of defence in the fight against militancy. The force is already reeling from continued onslaughts that have depleted its strength. It is also reported that police personnel are increasingly seeking appointments in sectors that do not confront the militancy head on, such as the motorway police, FIA, etc. The last thing the beleaguered force needs is further demoralisation.