INDUSTRY associations are stepping forward to express their disappointment that commitments made to them are quickly withdrawn, and one of the largest such groups has even referred to this pattern as ‘knee-jerk U-turns’ in policy implementation. The latest such example is a notification issued by the power division that tells all distribution companies to include add-ons and surcharges on top of the 7.5 cents per unit that the exporter community was told they will have to pay for power. The commitment was given at a very high level last year and on Jan 13 of this year, it was not only withdrawn, but exporters were told it would be effected retroactively from Jan 1, 2019. What this means, effectively, is not only that the government is withdrawing the commitment, but has reneged on it altogether and now wants to collect all the monetary benefit that exporters have availed through it to be returned to it.
Beyond the power tariff, the government has also reversed a tax credit that had been offered earlier for investment in plant and machinery. This had the same effect as being retrospectively applicable since the investment had already been made under the assumption that the funds utilised would benefit from the tax credit. The government could reverse its commitment, but the funds once committed cannot be similarly reversed. On top of that, the government had announced an incentive package for mobile phone assembly in Pakistan, and once the investment had been made by a number of parties, it cut import duties on mobile phones, rendering the investment suddenly non-competitive. One after another, examples are piling up of the government making commitments and promises on one day, then either reneging on these outright or finding clever ways to not deliver on its commitments the next.
This is no way to run an economy. Industry leaders are now openly suggesting that policymaking has become dysfunctional. “Ministries are working in silos,” the Pakistan Business Council said in its statement on the problem, and the only priority that seems to be guiding government decision-making is ‘chasing revenue’. These reversals are all happening mainly for revenue purposes as the government ramps up its efforts to meet the ambitious targets laid out in the IMF programme in the second half of the fiscal year. In the process, all other priorities are obliterated, whether these include the promotion of exports or indigenisation of mobile phone assembly or the promotion of investment and industrial capacity. This speaks to a state of near policy paralysis with the government reduced to chasing revenue and building reserves to meet short-term targets only. A strong hand is needed on the tiller to navigate the choppy waters of the ongoing adjustment to rectify this situation. Left to its own devices, this sort of economic management will not pave the way for growth.
UK’s travel advisory
WITH the UK changing its travel advisory to Pakistan to reflect the improved security situation in the country, officialdom here has been given some breathing space.
In a statement, the British high commissioner to Pakistan, Dr Christian Turner, said: “Following my arrival in December 2019, I made this review of the travel advice a priority. It is great credit to the hard work of the government of Pakistan in delivering improved security over the past five years. I am delighted that British nationals will be able to see more of what Pakistan has to offer.”
The statement went on to say the improved security situation allowed British Airways to return to Pakistan as well as the visit of the Duke and Duchess of Cambridge.
This is a welcome step by the UK government and will hopefully send a positive signal to other countries also. It is indeed remarkable that in a span of five years, Pakistan has successfully broken the back of terrorism and brought life back to its normal rhythm.
Very few countries have achieved this level of success in combating terrorism in such a short period of time. This success has come at a steep cost in terms of precious lives lost and property destroyed. Now that we have overcome this threat, it is critical that the state initiate deep-seated reforms that address the root causes of extremism in our society so that this success becomes a permanent reality.
In the meantime, however, the world must appreciate and recognise the improved security situation and take steps that help Pakistan reinforce its more positive image. It is hoped that more countries will follow the UK’s example, re-evaluate their travel advisories and encourage their citizens to come experience Pakistan in all its living colours.
Pakistan may want to specifically market its regions for greater travel and visit opportunities. If there are some areas of concern in terms of security, those need to be focused on. Our aim should be to translate this improved security situation into a larger inflow of people coming here for tourism and business. In this respect, Karachi deserves special attention being the hub of commercial activity.
The city has suffered from law-and-order issues but can also boast success in overcoming this challenge. We need to now aggressively market this new normal across the world and reap the dividends of this success both in terms of perception and foreign exchange.
PTV licence fee
IF the intent was to engender even less goodwill among the public towards it the PTV may have certainly succeeded, but in all other respects its plan to raise its revenue by increasing the TV licence fee included in our electricity bills is doomed from the outset. It is telling of the mindset of those in charge of the public broadcaster that their singular concern is bridging the financial shortfall — amounting to Rs20bn a year — by passing the buck on to cash-strapped consumers, who have already experienced an eye-watering increase in power tariffs over the past 18 months. On the other hand, the only cost-cutting measure the PTV appears to have taken is to reduce the age of retirement for employees, thus saving approximately Rs18m a year. Proposing a bailout for itself without any financial plan or business development strategy that might justify the additional cost to consumers betrays just how much the PTV takes the public for granted — as well as its current lack of coherence and vision.
The PTV of today is a far cry from its golden days under the pioneering stewardship of Aslam Azhar, when the content it produced was a matter of pride for all Pakistanis. The public broadcaster was a vanguard in supporting public interest journalism, culture and the arts. Nowadays, instead of being a public service for the people, it has become, at best, an irrelevant and antiquated behemoth and, at worst, a political tool for the government of the day. The PTI’s 2018 election manifesto pledged to make the PTV autonomous, with its own board of governors, “similar to the BBC model” — a claim that was often repeated by its government’s first information minister. It is clear, however, that the change that was promised is nowhere in sight. Unless there is considerable restructuring of the corporation, including ensuring a completely independent and autonomous board, with a mission to deliver high-quality public interest programming, it is hardly worth justifying its existence let alone a licence fee hike.