The Shehbaz govt must take bold decisions and shake up the economy before it’s too late – Pakistan

Reform of Shock and Fear is the only plausible way to get better on the other side of this crisis.

My oldest political memory is of news headlines announcing another crisis in Pakistan. The Culture of Reading Newspapers at Home — We Serb And Newsweek to ummart — Meaning there were very few boring weeks. Years later, the story continues: Pakistan faces the biggest threat to national unity since 1971.

The economic crisis is wreaking havoc on an increasingly urbanized young population who are connected to the world through mobile phones. To stop this trend, the country’s ruling elite must reshape its economy. Given the lack of time and the depth of the challenge, the only options are shock and awe.

sinking ship

For decades, numerous governments have worked to stabilize these fast-sinking ships. However, recurring crises have made Pakistan the example of a global basket with the lowest economic growth rates: Morocco, Indonesia, Bangladesh, India, Vietnam and Nigeria. Compounding this problem is inflation, which, on average, is the second highest within the same group. Pakistani citizens are lagging behind their peers, and you can literally see this on the phone.

This kleptomania-based economy, hollowed out by rent-seeking elites who prefer to hide wealth in unproductive areas or divert it abroad, needs reform. Changing the circumstances around them, such as providing more subsidies to exports, cheaper credit to industries, or amnesty to formalize capital, won’t work and won’t work. There is too much attention and too much distortion to do this little by little.

What is needed is the courage and determination of a short-lived government that must find a way to fight Imran Khan’s dominant narrative. It would be foolish to compete in Khan’s realm around the continued dominance of mass rallies and news cycles. What this government has to do is show that it can make difficult choices and change the status quo.

the need for time

The process must begin with three major measures: rationalizing energy prices, including oil and diesel, in a time lag, while at the same time withdrawing the Prime Minister’s policy to set these prices. If necessary, it aggressively privatizes state-owned enterprises at exorbitant prices. A radical reform of the agricultural market, starting with wheat and sugar.

These measures will certainly increase inflation, harming millions of ordinary citizens, but can alleviate suffering through direct benefits. To do this, governments must immediately mine digital identity data linked to cars, travel and real estate. Digital identity data must also be used concurrently to open zero-balance bank accounts for the general public. Based on the mapping work, direct transmission to ordinary citizens should expand exponentially, providing direct relief to millions of households.

This amount can be financed with the savings created through the steps described above. Pakistan More than $17 billion in benefits annually And subsidies to the few at the expense of the many. Reassigning these resources to ordinary citizens over time is not only an economically sound decision, but also a morally sound decision.

familiar with elections

In addition, a focus on ensuring that citizens receive direct benefits during these difficult times of the election cycle can also benefit elections. An efficient service delivery strategy has made India’s BJP a dominant force.

in his book The New BJP: Modi and the Birth of the World’s Largest Party, author Nalin Mehta said that while the BJP senior leader in Uttar Pradesh said “Hindutva is like an elephant’s tooth”, efficient delivery of services through welfare benefits “is the wheel that moves everything.” BJP’s local involvement to ensure that village-level citizens benefit directly from the government has raised the level of support for the party, especially among women and economically disadvantaged communities.

These reforms could have short-term political costs and increased pressure on governments, given that no reform is without an early stage of suffering. However, this can be easily explored, especially if government legislators are actively involved at the local level to enable voters to sign up for zero balance bank accounts and receive the corresponding benefits.

Critics may argue that this is just an extension of the sponsorship and there will be leaks. This problem can be easily addressed by digitizing and automating the approval process for recipients. This is not rocket science, and the government has the tools to do it at scale. There may be data issues at first, but they can be addressed as you progress.

Such a strategy will provide citizens with an alternative story ahead of the current government’s elections. Direct relief provided to many while pursuing strong economic reforms that put the economy on the right track could bring the political and economic stability Pakistan desperately needs.

Without it, there would be much more suffering and chaos throughout the country. Pakistan may not come close to the tragedy that is happening in Sri Lanka, but the island nation’s chaos should be a warning sign. If the elites fail to resolutely respond to a series of crises, the situation becomes increasingly complex, creating storms that eventually wipe out decades of progress.

Given the rapid evolution of the world, including the emergence of a multipolar geopolitical system and a tightening global monetary environment, Pakistan must act quickly. Reform of Shock and Fear is the only plausible way to get better on the other side of this crisis. The Sharif government and its allies must not waste this crisis.

Header illustration: JeremyCulpDesign/