The transformative moment by Khurram Husain

THERE is a notion that deep-rooted and wide-ranging change is brought about through the actions of a ‘great leader’. Those who subscribe to this notion often reduce all discussion about social and political problems of their time to whether or not the single leader in their country is good or bad.

In Pakistan, there is any number of people who subscribe to this notion, and the most famous among them is Prime Minister Imran Khan himself. There is no shortage of speeches he has given, especially during the days of containers past, in which he promised quick and rapid change in the country once the leadership was changed.

This was the mindset Khan brought to power after the elections of July 2018. He thought he would preside over a transformative moment of sorts, that moment when the correct leader enters the highest office of the land (on paper anyway), and quickly the process of healing begins in society and progresses so fast that change is visible to people.

From the container came the promise that the tax base of the country would broaden itself once an ‘honest leader’ became the prime minister, because the people of Pakistan are ‘the most philanthropically giving people in the world’. They want to give to help improve their society, but don’t give because, according to the dharna speeches, they have no faith in the system and fear that their tax money will be devoured by Nawaz Sharif and ferreted away to wealth abroad.

There was to be no transformative moment, it seemed, only a slow, drawn-out, and painful economic adjustment.

Once in power, Khan had to deliver the transformative moment. But things were a little more complicated. The country’s foreign exchange reserves were depleting fast, and an urgent approach to the IMF was necessary to prevent a balance-of-payments crisis from developing. Upon seeing the requirements that a Fund programme would bring, the government dithered.

As the shortages of foreign exchange grew, the first card was played as it was decided to launch the transformative moment right away. In his speech asking overseas Pakistanis to deposit money in the dam fund, the prime minister was actually launching the first transformative moment of his term, playing his trump card early. He seemed to believe that once he sounded the clarion call, money from abroad would come in such quantities that recourse to the IMF could at least be put off long enough to help build some sort of negotiating position.

Of course, the funds didn’t arrive. So the scheme was redesigned as the Pakistan Banao Certificate scheme, and relaunched once more. If they don’t want to give for infrastructure finance, surely they will be willing to loan the money to their own country, the designers of the scheme thought. But even here, interest was so tepid it fizzled out shortly after being launched.

By now, we were a few months into the IMF negotiations, and the country had already borrowed something like $6 billion from China and Saudi Arabia to tide over the payments gap. A whispering campaign began against Asad Umar, engineered by his peers within the party, who wanted him gone along with all talk of a ‘home-grown’ plan instead of an IMF programme. That departure came a few months after the end of the certificate scheme.

At that point we had our third attempt at a transformative moment: the amnesty scheme, or should I say, the first amnesty scheme of the PTI government. I have never seen a prime minister give as many televised addresses to the nation to promote an amnesty scheme as we saw Khan give back then. The idea that somebody had ostensibly sold to him was that the scheme would unleash a tsunami of undeclared assets to come flooding into the formal economy, and the revenues and dollars earned could make the IMF program redundant.

The leadership seemed to believe much of this, given the extraordinary push behind the scheme through numerous televised appeals to people to participate. The participation was there, but nowhere near the scale it was supposed to be, and the matter was dropped like a leaden weight.

After that, the trumpet fell silent and reality took control of the driving seat. There was to be no transformative moment, it seemed, only a slow, drawn-out, and painful economic adjustment, which would involve all those things that this administration had berated past rulers for: devaluations, taxes on petrol and diesel, power tariff hikes, privatisation and layoffs at public-sector companies, and so forth.

Today, the hope and thirst for this transformative moment is back. The so-called construction package being hammered out, complete with an amnesty scheme and hundreds of billions of rupees of promised subsidies, tax relief and incentives for property market speculators, comes clothed in the garb of another such transformative expectation. From the amount of money they are talking about pumping into this package, it seems they are expecting trillions of rupees of undeclared cash to suddenly come flooding into the property sector, where it will become fuel for a massive construction boom.

From the way they are trying to put wind in the sails of a housing development scheme that was dreamed up by Pervez Elahi back in the mid-2000s, and proved to be delusional in its scope and designed to produce nothing more than a short speculative bonanza around the Ravi river banks, it seems somebody at the top is convinced that this is the transformative moment he has been living in the expectation of. But the reality remains stubbornly simple. Some money will come into the property trading sector. Some construction activities will indeed be unleashed. But by the time the dust settles on this latest chase of a mirage, they will learn what the sugar inquiry commission report taught them all too late: the amount of money pumped into the scheme by the state was no match for what came out of it.

The writer is a member of the staff.

Twitter: @khurramhusain

Published in Dawn, July 23rd, 2020

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