ISLAMABAD : Brigadier (retd) Aslam Khan, Chairman of Pakistan Economy Watch (PEW), said on Tuesday that the SIFC has emerged as the only hope for economic recovery amid increasing political uncertainty.Â
The elections left the country in a polarised and unstable state, as they did not deliver political stability but instead created uncertainty and legitimacy issues.
Aslam Khan said that all three major parties declared victory soon after the elections and claimed they were the largest party in the National Assembly. But soon, it appeared that neither won a simple majority, leaving no party in a position to form a government independently.
Therefore, he added that a split mandate will soon result in a weak coalition government that cannot deliver, which will fan the masses’ frustration.
Aslam Khan said that the new government will face several daunting challenges. The most important is dealing with an economy still in the ICU and soaring inflation that has fuelled a cost-of-living crisis.
It is believed that the new government will be unable to maintain the economic stability achieved by the caretaker government through unpopular decisions.
He said that the new government would be unable to implement tax reforms, revive or sell lost state-run enterprises, and would not like to see further energy price hikes as decided by the IMF.
The split mandate will hinder political and economic stability. It will also be challenging to sign another agreement with the IMF, which is necessary to save the country from bankruptcy.
Politicians would focus on horse trading, keeping allies happy, and dealing with the opposition as they were handled, while economic stability would be outside their list of priorities.
He said that in this grim scenario, the Special Investment Facilitation Council (SIFC) could play a crucial role in implementing necessary but unpopular decisions despite opposition from some quarters.
The SIFC should be further strengthened to help steer the country out of problems, as expecting politicians to deliver is self-deception.
He observed that the SIFC must be the driving force behind structural reforms regardless of the interests of political and business elites.
Aslam Khan said that inflation, rising energy prices, and costly imports have taken a toll on the masses and increased business costs.
The ever-growing circular debt cripples power and gas companies, hindering infrastructure investment and service delivery and pushing masses to the wall.
He said frequent price changes create uncertainty for consumers and businesses, hampering long-term planning and investment decisions.
Extensive cross-subsidies and distorted pricing burden the government and fail to reach the most deserving. Dependence on imported gas exposes the sector to volatile global energy markets.
Then, on top of this, there is leakage and theft that are costing Pakistan billions annually and impacting supply.
He said that SIFC should investigate the energy sector, as power and gas companies suffer from outdated infrastructure, poor governance, operational inefficiencies, and massive corruption, which lead to high costs and service disruptions.
He added that the lack of competition stifles competitiveness and discourages efficient management practices, damaging the economy.
Handling imported gas is often criticized as it only adds to the financial burden, but local exploration is still not a priority.
