Hina Rabbani Khar taking oath as the Minister of Foreign Affairs in 2011 | White Star
The assistance that the PPP [Pakistan Peoples Party] government [received] was in no way close to the support that the IFIs [International Financial Institutions] such as ADB [Asian Development Bank] and the World Bank gave during Musharraf’s time. The PPP government did receive a package from the IMF [International Monetary Fund] but the support that Pakistan had received on the economic front during Musharraf’s tenure was much higher in comparison.
Now that I am able to look back at that time, I realise that the United States and its corollaries are much more supportive of dictatorial regimes than they are of political regimes. That is what – fortunately or unfortunately – happened as we transitioned from Musharraf to the PPP government.
Working in the Musharraf government was almost like working in the corporate sector. Cabinet meetings were conducted in a corporate environment. It was very simple work in some ways. Parliament would ratify whatever the cabinet proposed.
When I compare it to working with the PPP government, it seems that working with a political government is so much tougher. To get anything done requires a lot of political skills. There were always a lot of hurdles in any policy being approved and implemented. There were very few hurdles in the previous era. On the surface, it looks like all this depends upon the approach a government adopts but, obviously, this leaves many questions unanswered.
Jan. With all the money that came into Pakistan during Musharraf’s time, do you think there could have been a more long-term economic policy to sustain the gains? Do you think there were mistakes made?
Hina. Of course, many mistakes were made. For instance, the power crisis was not taken seriously. That was the biggest mistake ever. Musharraf could have built any dams he wished. He, instead, decided to work on a dam literally in the last leg of his government. The things that actually concerned the longevity, efficiency and productivity of the industry were brutally ignored. It was a bad policy.
There was, of course, that euphoria surrounding things like easy access to credit which allowed many people to get goodies including cars on lease. That created an apparent boom in the economy but, as we saw, it was indeed very short-lived.
Jan. After the global financial crisis in 2008, foreign assistance just dried up. How well did PPP respond to it?
Hina. Frankly speaking, PPP responded as well as was possible compared to how the economic situation is being managed now. I have a huge problem with anyone who wants to manage the balance sheets rather than managing the economy.
This government has been uniquely positioned since it had the same finance minister Ishaq Dar [compared to the PPP government that changed many finance ministers]. It has been managing the books rather well but has been holding back the productive sectors of the economy like no other government has. Industries have been closing down. Agriculture is dwindling. It has not performed well in the last five years. Export growth has gone down. There has been no policy direction whatsoever.
PPP was given a very difficult economic environment as oil prices ranged anywhere between 100 US dollars and 120 US dollars per barrel at the time. This government has been buying oil at 40 US dollars per barrel. Did they charge us any less? Did they make electricity any cheaper?
They also have this unique policy of holding back money from the private sector. Any government’s job is to create financing for the private sector but they have been holding back even tax refunds. They have been spindling away all the liquidity that existed in the market by excessively borrowing from banks. The government has been the biggest borrower.
Their economic performance shows that they have done relatively badly in a rather easy time. World economy has been relatively stable in recent years and credit has been available at cheaper rates.
They also do not have a Supreme Court like the one we had in our times. They have a Supreme Court that is giving them political problems but economically it is not giving them any trouble. Whatever decision we took in the Executive Committee of the Cabinet, it was challenged at the Supreme Court. If it was not challenged, a suo motu notice would be taken about it.
There was a well thought-out plan to sabotage any economic decision that our government was trying to make — whether it was the import of LNG [Liquefied Natural Gas] or power sector reforms. But the current government has been able to do it all at quite a fast speed.