PDA

View Full Version : Dar and the TONS problem - Mosharraf Zaidi - 10th June 2015



Realpaki
10th June 2015, 11:15 AM
The one thing the PML-N can legitimately claim, as an advantage over its competition, is the richness of talent at its disposal. Prime Minister Nawaz Sharif, for all his limitations, has a remarkable record of drawing highly talented, well-regarded men and women to his ranks.

This is not breaking news. People in the commentariat have been saying this about the PML-N for a long, long time. The earliest memories I have of this realisation goes back to the first Sharif government, when he brought in expatriate private sector talent into government to turn around white elephants.

My personal favourite was Shaukat Tarin. Why? Because he represented the ultimate success and failure of the technocratic approach. On the one hand, Tarin has been a monster reformer. He turned around more than one government-owned entity in his heyday, but also became a voice for reform in his given area – banking and finance. On the other hand, Tarin is a classic high-performance, technical guru, with all the innate contempt that this class of Pakistani has for politics. Who can forget his outburst about MNA waghaira in the last government?

This is the paradox of technical prowess located inside the rough and tumble world of messy electoral politics. It is also a paradox that remains lost on some very passionate and sincere Pakistanis, on both sides of the divide: the pro-democracy types that want us to abide really shoddy governance for the sake of institutional maturity and coherence, as well as the pro-technocracy types that want change, they want it now, and they don’t really care what the instrument of change is, as long as change is delivered by people in suits that speak English.

The ideal marriage is a mixture that lies between the political, which is electorally legitimate, and the technocratic, which knows what the hell it is doing, and how the hell to do it. And the ideal nikahkhwaan, or moderator of such a marriage, is supposed to be Nawaz Sharif, especially given the impressive stable of technocratic-cum-political talent at his disposal. Here’s the problem. He has a favourite horse, and he trusts him virtually everything. His name is Ishaq Dar.

Of all the technocratic talent at his disposal, the myth is that Ishaq Dar is the best among the best. He has the right combination of experience, expertise and Trust Of Nawaz Sharif (I am going to call this elusive entity by its acronym, TONS, heretofore). Of course, there are several qualities missing from this assessment of Dar. He has no electoral legitimacy. None whatsoever. With his temperament, it would be a miracle if he were to win even a union council seat, what to say of elected national office. He is also an accountant, not an academic, and certainly not a visionary with bold ideas about the economy and what Pakistan’s micro and macro-economic profile was, is and should be.

Those are qualities that his boss Nawaz Sharif has, and qualities that he and an army of trained dream-killers known as bureaucrats work hard to relegate to the back of mind. (Side note: is it weird that the people that have the most TONS in Pakistan are those kinds of people: accountants, bureaucrats, former bureaucrats, and wannabe bureaucrats?).

In any event, the Dar problem that the prime minister has is multifarious. On the one hand, he has to give him the keys to the republic because he has already given him the keys to the House of Ittefaq. On the other, Dar Sahib has missed every major GDP growth target that he himself set for himself last year. The 4.24 percent GDP growth achieved last year was almost a full percentage point lower than the 5.1 percent GDP growth target. That is not a small miss. At almost $280 billion nominal GDP, missing the target by almost one percent means that we missed adding nearly $3 billion to the economy last year. The news was as bad in the most important sectors; agriculture, industry and manufacturing all grew slower than they should have.

Yet somehow, Dar Sahib is the toast of The Economist, and of the IMF. Or so the PML-N and Dar’s very tiny, but influential corps of supporters, would have us believe. Yet read the big story in The Economist carefully. Or at least read the headline from the May 2 story titled ‘Fuel Injection’. The sub-heading for that story, which is supposed to be an endorsement of the Dar model of economic management? – “Lower oil prices prove to be a boon”. The biggest piece of good news that the finance minister claims to have brought to Pakistan, our higher forex reserves, are a product of factors completely exogenous to the vision or execution of the folks that run the finance ministry.

The IMF’s faint praise of the management of this economy is also laced with poison. Here is an institution that has never once come up with an idea to help Pakistan. Instead, it lurches around the corner of every bad turn Pakistan has taken, to take advantage of the culture of non-politician technocrats being assigned the job of running the finance ministry here. What do technocrats worry about? Solvency. Why? Because it is easier to massage a bunch of suits who don’t like paying subsidies than it is to deal with constituents who don’t like paying taxes. If you keep the country ‘solvent’ as a destination for relatively cheap credit, you delay politically difficult fiscal decisions.

This country has spent the better part of two decades financing its debts as the top destination of Pakistani taxpayer rupees. On average, Pakistan spends almost a third of its entire budget every year on paying back its debts. Yet not a single finance minister in memory has challenged this paradigm.

In 2008 I wrote a column encouraging the government at the time to eschew another IMF programme, as the global economy faced the financial meltdown caused by the greedy wolves of Wall Street. Yet back then, I had advocated an option that is simply not realistic. You cannot default in 2015. Not if you’re Pakistan and not if your state and society as are rife with conflict as they are. But you can ask for debt restructuring, can’t you? Pakistan can. It should. And with finance ministers like Shaukat Aziz and Ishaq Dar it won’t.

Does any of this raise questions about Dar’s competence or patriotism, or integrity? Not at all. In fact, I genuinely think his impatience is part of his virtue. In many ways it is very similar to the quick-tempered supporters of Imran Khan who are as easy to rile up as Dar is. Virtue alone does not a republic make.

The biggest concern the prime minister needs to have is not so much that Dar sahib has missed his GDP growth targets, or that his vision of the economy is limited. The biggest reason is TONS. Having as much TONS as he has means that his voice is the only one heard within a stable of talent that is essentially being wasted. This isn’t just a problem of personalities. Not just a problem of wasting the talents and potential of people like Ahsan Iqbal, Chaudhry Nisar, Khurram Dastgir Khan, Daniyal Aziz, Miftah Ismail, Muhammad Zubair or others.

This is an institutional problem. The Finance Division has swallowed whole Revenue, Economic Affairs, Planning, and the audit and accounting function. Half of Pakistan’s foreign policy is run by Dar. Commerce, Industry, interprovincial relations, relations with the PTI, managing bilateral and multilateral donors. Is there a government function that PM Sharif has not allowed to be run by Ishaq Dar? And is this the best use of a genuinely good man who just missed the majority of his GDP growth targets?