For an economist going by the book, Nawaz was a saviour of Pakistan bringing down its inflation rate significantly & boosting its GDP per capita at the same time. Nawaz's economic numbers look like that of a student who scored a distinction in his assessment with a medal. GDP per capita improved, Inflation rate came down, GDP from manufacturing, mining, construction & even agriculture improved. So, what went wrong here? Why would a regime that shifted the gear of a recessive economy to that of a bolstered one lose a re-run in the latest election? Nawaz was a very successful business man. One thing he knew very well was how to make money. So, when he took charge in 2013, he ensured that he used his expertise to generate revenue for a staggering & war-ravaged Pak economy. Thus, he used a stimulus approach similar to what Obama did in the 2008 USA housing market crash. He made an expansionary fiscal policy, got loans & increased government spending by investing in massive infrastructure projects. Solar parks, Coal energy project, Roads, Motorways, Airports, Universities, Hospitals, Schools. CPEC was launched bringing in international investment. This improved the unemployment rate boosting consumer spending as more people got jobs in these projects. The result was a decreased inflation rate as more people's purchasing power improved. Ismail Miftah was the pioneer pilot in building a jump start for Pakistan in Nawaz's years. He knew what he was doing. This expansionary model worked in making Pakistan's economic indicators improve. However, here is the problem. Nawaz may have been able to stimulate Pakistan's economy but the revenue he generated never reached the common man of Pakistan.
Nawaz's family stationed in key positions of his government ensured that they kept part of the pie he was trying to create for the nation. Ishaq Dar's embezzlement of funds is no secret. The man who sold an entire bank of Pakistan for peanuts without any shame is still running away from Pakistan's authorities. Another problem that happened was that even if we believe that Nawaz started these projects with good intentions, the concern is that quite a few of these ended up being white elephants absorbing billions of rupees, giving employment to many locals but failing to yield productivity. Nandipur is a classic example. So, even though Miftah thought he could change the mathematical figures of economy by orchestrating this very expensive stimulus package, the results were unexpected. Just like Obama is still criticised over his Bank's bail-out that ended up being abused by the CEO's in their luxurious vacations, the money borrowed to invest in solid infrastructure got filtered in the hands of bureaucratic middlemen & corporate pirates who ensured that the net productivity of these projects never reaches the doorsteps of an average Pakistani. So, we never saw stable petrol prices/electricity bills or decent looking healthcare/education government facilities at the district level. When you allow the money to get wasted in so many corrupt hands, you will never see it deliver to an average voter. Nawaz had no control over the corruption of NAB, FBR or any of Pakistan's democratic bureaucratic departments. He technically had to facilitate their corruption in his attempts to keep the lid on the fiscal crimes his family was committing all while he was being dragged into the court of law by the opposition party on this. This is where he went wrong & his genius failed his voters not just his own destiny. Had he ensured 100% accountability of the system along with his life-saving stimulus package, he would have been able to keep his promises giving an average voter a house, job, affordable produce & quality education & healthcare. This would have brought a positive revolution of its own negating the street revolution that his adversaries tried to bring.
Another blunder he made was that he sold the printing rights to the state bank of Pakistan thus losing control over the value of PKR. Since he made this sale, we now see PKR devaluing despite the improving economic indicators, the nearly-obliterated terrorism & the billion dollar cash cow i.e CPEC. Imagine if this was not the ONLY Islamic country with a nuclear bomb engaged in an active conflict with the fascist regime of India over Kashmir actively advocating for the freedom & right of self-determination of Kashmiris. Just Imagine if Pakistan had none of these traits and had so the same improved economic indicators, a billion dollar CPEC investment & no more terrorism. PKR would have improved not devalued. But, here is the twist. The values of current FIAT currencies including the American dollar or the PKR are manipulated by very subjective parameters designed by just a few people sitting at the top of the pyramid. So, in spite of seeing so much improvement & a billion dollar CPEC stimulus, why is the PKR being devalued on purpose? Because Pakistan is on the economic hit list of USA/NATO who are freaking out because they feel that they are losing control of this hen that gave golden eggs to them every day. They also feel that this golden-egg-bearing hen is now going in the lap of their worse adversaries i.e China & Russia. Thus, currency devaluation is a way to ensure that an expensive IMF/WB bail-out can be pushed thus mortgaging the liberties of this golden-egg-bearing hen to those controlling the IMF/WB.
Some of you may argue that its our deficit & worsened debt to GDP ratio is what is responsible for this devaluation. But, the reality is that most of the global economies of the so-called free world have a worse debt to GDP ratio than ours. How come their currencies are not devaluing like ours is?
The reality is that US has the ability to shake up any country's currency through its federal reserve bank regardless of the true economic health of that country. We saw that happen to Turkey just a few days back. As John Perkins stated earlier that economic shake-ups are used by US to get their way in countries that fail to obey "the Grand American dictatorship". So, we now have a devaluing PKR despite improving economic indicators & negligible incidence of terrorism. I can throw the blame on Nawaz for this because he gave USA the key to make these devaluations happen spuriously by giving the state bank the printing rights of PKR. Now, we are seeing people giving up on their saved PKR buying dollars instead under this trend leading to a further decline in this value. If the trend continued, we are looking at a Venezuelan-like fiscal collapse under a growing hyperinflation. In 1923, Germans made wallpapers out of their currency & even used it to make their fireplaces burn. This is what happens to all FIAT currencies. Since they are backed by nothing but such ambiguous subjective mood-swings of economic hitmen, we see the strongest of nations collapse under pressure.
Coming back to Nawaz's failure, now that his government is gone & the treasury he left is either all swindled by his allies in Pakistan's bureaucratic institutions or exhausted in the failing projects that he launched....what should we do now? Should we launch another stimulus package making the IMF happy but destroying our long-term stability in the interim? Should we abide by the conditions of USA blindly jeopardizing our own safety like we have been doing for years? Should we beg China for more loans or try to squeeze out a better deal on CPEC? Should we generate more bonds to buy all of our government debt thus burdening the masses with a higher taxation?
NO. The answer is NO to all of the above.
There is a way out. I am writing it down. I will share it with you soon. Stay tuned.
-Dr FAB (Fariya Bukhari)
Chairperson PakIslam Positive League
I am a blogger, a practising physician, a defence strategist, a poet, an activist, a scientist, a humanitarian, a philanthropist, a politician and a mother of three children who wants to leave a better world for our future generations before I take off.
