Bloomberg gives good marks to PM

Courtesy:- S Rahman

Bloomberg that is not in love with any entity and which has the reputation of giving candid analysis, has given good marks to Prime Minister Nawaz Sharif for managing to start turning around the country’s economy despite facing rough six months of street protests, weak economy and law and order situation.

The media company headquartered in New York City, in keeping with its tradition of giving independent opinions on financial, political and economic issues, has opined in one of its latest articles, “Corporate earnings are soaring, stocks have surged and the currency is among the world’s top performers. Add to it, the factors of lower oil prices, higher remittances and increased consumer spending. All these are pushing growth towards a seven-year high.”

Going further in its analysis of Sharif government’s performance in the most important sector of national development i.e. economy, Bloomberg has taken into account the ground situation faced by the government that was not totally conducive to growth. Reference has been made in this connection to some of the worst fuel shortages, Army Public School child massacre that shocked the world as well as to the street protests that have been aiming at nearly ousting PM Sharif.

Applying this yardstick is probably intended to evaluate the performance objectively. If drawbacks and bottlenecks are kept in consideration then the picture gets yet clearer as to the actual net performance of any state entity or government otherwise it will become a depiction of a never-never land with unreal situations.

According to the Bloomberg article, “Economic indicators are good and satisfactory despite many challenges.”The article stresses that while much more needs to be done to fix an economy dependent on financing from the International Monetary Fund, the perception of Pakistan of today is that “it is starting to change”.

The article has also relied upon the statement of Sayem Ali, head of the investments strategy and advisory of the Karachi unit of an international financing organisation: “Sharif’s government has improved things with the help of IMF. They have put Pakistan back on the radar in terms of international investors.” When Sharif took power in May 2013, he faced a balance-of-payments crisis that forced him to seek help from the IMF.

“Now the foreign exchange reserves have doubled in the past year to $16 billion, the budget deficit has narrowed and inflation is easing as global oil prices fall,” the article said. Even the recently retired IMF mission chief Jeffrey Franks is on record having acknowledged last month: “I see Pakistan breaking with past precedent of failed IMF programmes and half-completed reforms, which set the stage for a crisis.”

In this regard, the Sharif government’s strategy has yielded remarkable results that owe much to the satisfactory completion of reforms undertaken by the government under the strict supervision of Finance Minister Ishaq Dar. Hitherto, the world lenders had been complaining, quite rightly, against our former economic managers’ repeated failures to complete the reforms that were otherwise considerably manageable. Unfortunately, our former economic managers’ performance could not come up to the mark due to the incompetence of the people at the helm of affairs in the past. And now, thanks to the sustained efforts and visionary approach of Nawaz Sharif government’s finance team, Pakistan has regained its eligibility to borrow from the International Bank for Reconstruction and Development, making it eligible for $2 billion of credit over the next four years. The IMF is also optimistic that Pakistan would meet the conditions of the $6.6 billion loan, as well, that it received two years ago.

Of late, the delegation led by Franks’ successor made these observations on March 9 last: “The country (Pakistan) has a good foundation for further growth”.

The IMF also forecasts Pakistan’s economy to expand 4.3 percent during the current year, compared with the five-year average of 3.6 percent.

In addition to the IMF observations, Moody’s Investors Service has also appreciated Pakistan’s moves to bolster its public finances and has termed these moves “credit positive”. In one of its reports, Moody’s analysts have observed: “It is striking that reforms have continued despite disruptive domestic political challenges over the last year.”

One element of country’s upward economic jump has been studied in depth and highlighted by Jawaid Abdul Ghani, a professor at the Karachi School for Business and Leadership. And that is about the expansion of Pakistan’s middle class which, according to the professor, has more than doubled to 84 million in 2002-2011. Experts believe that following the year 2011, there has been yet greater expansion of the middle class which means improvement in the living conditions of almost half of the nation.

Besides the aforementioned economic indicators, the benchmark KSE100 stock index has rallied 62 percent since Sharif took office, the sixth-best performance among 93 world gauges tracked by Bloomberg and over the past six months, Pakistan’s rupee has outperformed every major global currency.

The private sector is also coming into play and contributing effectively towards the economic growth since the government is taking all necessary measures for strengthening the role of private sector in economic turnaround.

In the end, the Bloomberg article says: “The long-term economic benefits are huge despite organizational and political challenges that have continued to stand in the way.”