Extraordinary measures
EXTRAORDINARY circumstances merit extraordinary measures" - and yes, these indeed are extraordinary times where Pakistan's idealogy and its social structure face an existential threat from an enemy within that shows no respect for the un-crossable humane boundaries; not to be violated even when in war.
There has been a lot of noise in recent days on why the civil justice structure should not make way for a martial one and the reasoning stands on good grounds. A desirable justice system is one that is not only fair and unbiased but also dispensed by qualified legal persons who deeply understand the nuances of law and the need for objectivity, whereas, the military courts as we know may perhaps lack on both counts - History tells us that martial courts are often found wanting on 'due process' and naturally being in response to a war tend to carry a certain degree of bias.
However, this is no time to look pretty because the other side knows no mercy. Our army will need our complete support and a free hand both militarily and politically to use every means at their disposal to defeat this menace.
The government has done well by deciding to back this requirement of a swift trial system of miscreants under the military courts and by ensuring that this space is provided for a limited period of two years and is kept limited to terrorists and anti-state elements only. On a prudent note, it is better to yield control for two years than to have nothing to control - "Run as you may but don't drop the baton, without which the effort becomes meaningless." ~ Duke of Wellington.
Try as you may but if there is no security then significant investment of any kind will not be forthcoming. And this is precisely why the economic implications for such extraordinary measures run far beyond the gains that are visible merely as the obvious.
A state's fundamental duty is towards the economic well being of its people by ensuring adequate employment generation and equitable distribution of economic opportunity in an economy.
In fact countries that lead the way in corporatization of their economies do so by ensuring that there exists a dedicated judicial structure qualified to not only adjudicate on key corporate matters pertaining to anti-trust, mergers and acquisitions, corporate governance, consumer interests, taxation, etc., but one that is also geared up to dispense judgments within a stipulated time - Beyond a specific time frame rulings on economic matters invariably lose their relevance. Pakistan's economy also fights an uphill battle that will not just be won by short- term balancing of books through enhanced borrowings but will instead require some 'extraordinary' vision to see it through.
A vision that looks at the larger picture and evolves a holistic approach aimed at tackling in tandem all facets of an underlying economic structure in an economy.
It is in this context that the recent governmental endeavor to impose an extra 5% General Sales Tax on the sale of petroleum products to the average consumer comes as a disappointment. One can understand that with fast declining global oil prices while on one hand the government (without having done much) is having a boon through an improved external account position, but on the other hand it is also having sleepless nights since lower value of oil imports means lower revenue through direct taxes imposed at its import stage. However, knee-jerk measures like this never provide the right solutions.
In fact, even more alarming is the danger that given such skewed thinking of our economic managers, an opportunity that has come our way in the shape of low oil prices after a gap of nearly three decades may just end up being wasted by their sheer incompetence.
Pakistan's Achilles heel has always been its external account. With a large external debt (in dollars or another foreign currency) to be serviced every year, low exports and high imports mainly of oil, both for petroleum cum energy requirements and for edible purposes, we have always struggled to contain our current account deficit (CAD).
Today with a dramatic fall in oil prices (down from $120 to $50 and sliding) and with a general crash in global commodity prices across the board including that of edible oils the scenario presents a unique opportunity for Pakistan. Not just in terms of released pressure on the CAD but also in the shape of lowest inflation level in a long time owing mainly to external factors cum developments.
By a visionary economic leadership, these developments would have been viewed as an ideal opportunity to unleash economic activity in the Pak economy and to in-turn pave way for employment generation and growth.
To minimize the prevailing energy crisis by capitalizing on low furnace oil prices and making functional the currently idle power generation capacity based on furnace oil - On today's prices this should be a revenue earning exercise for Wapda.
To endeavor to lower interest rates and to reduce its own unnecessary cum frivolous expenses in order to ensure that extra resultant fiscal space created by reduced commodity prices and subsequent lowering of inflation is effectively diverted towards the private sector, for it to subsequently unleash its own natural synergies through entrepreneurship and investment. Sadly we are seeing none of it.
Myopic moves like playing clever with the general public and denying them their due relief can only result in diverting precious capital from productive use in the private sector to the inefficient hands of the government and an inequitable incidence of tax that burdens the common man and chokes economic activity per se.
The fear is that an opportunity like a low oil price cycle does not knock on one's door very often and even when it does the window of opportunity is rather limited. It will be a shame if this government squanders it by failing to harness its real potential to turnaround a struggling Pak economy.