India’s PM has earned his glory; Pakistan ex-PM’s reforms are being debated. By Shahid Husain
However, there was a major difference. Economists point
out that there was no significant divergence between the policies pursued by Aziz, and the FMs in the earlier regimes. They agree that the distinction lay in the “effectiveness of implementation.” In contrast, Singh was hailed as the new messiah of globalisation by the middle class.
Later, Aziz claimed that after the initial period, Pakistan’s economy became buoyant. Economists said that regulations in the financial sector did ease, and the relationship between the Central Bank – State Bank of Pakistan (SBP) and other banks became cordial. The latter situation changed after the SBP was headed by Ishrat Husain, although banks should ideally be regulated by the Central Bank.
As 9/11 stunned America, Musharraf ditched Afghanistan’s Taliban and became a faithful ally of the Bush administration. This helped in easing global pressures on Pakistan. It led to a wave of capital inflows, and Aziz took the credit for it. Pakistan sent strong signals to the US and others that it was pursuing ‘responsible management’ initiatives, and succeeded in wooing foreign investors.
Many contend that this happened because America wanted to help Pakistan. Yet another factor that aided the inflows was due to the rise in global oil prices in 2003, which forced Middle East investors to seek new geographies where they could invest in. Fortunately, they also chose Pakistan. Post 2003, Pakistan boosted public investment and this spurred growth. But this had happened in the past and does not point to any miracle by Aziz and his colleagues.
The capital inflows resulted in a consumer-spending boom. It led to huge investments in real estate and stock market. Aziz boasted that the growing sales of bikes, mobiles and other gadgets indicated prosperity of the middle and lower-middle classes. Critics think that all emerging markets gained from global inflows, which led to a rise in domestic prices of food products, and materialistic consumerism is a global phenomenon, not unique to Pakistan.
Now that Aziz is out, the challenges before Pakistan include the 7% unemployment rate leading to a fear of lack of jobs, a dissatisfied intelligentsia, the possible impact of the downturn in the US economy, and the manner in which public assets are being sold to reduce deficit. One reason behind the ousting of Chief Justice Iftikhar Muhammad Chaudhry was his undoing of the privatisation of Pakistan Steel Mills at throwaway prices, a step taken on behalf of Aziz.
Ironically, Aziz’s achievements and criticisms remind us of Singh, who is facing similar pressures. No doubt, the two have earned their place in history as leaders upon whom greatness was probably thrust. Yet, they will share one common link – both owe their office to some one else. For Singh, it is Narashima Rao and Sonia Gandhi. For Aziz, it is Musharraf. Thereby hangs the tale of two neighbours, and the paths they have chosen.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
However, there was a major difference. Economists point
out that there was no significant divergence between the policies pursued by Aziz, and the FMs in the earlier regimes. They agree that the distinction lay in the “effectiveness of implementation.” In contrast, Singh was hailed as the new messiah of globalisation by the middle class.Later, Aziz claimed that after the initial period, Pakistan’s economy became buoyant. Economists said that regulations in the financial sector did ease, and the relationship between the Central Bank – State Bank of Pakistan (SBP) and other banks became cordial. The latter situation changed after the SBP was headed by Ishrat Husain, although banks should ideally be regulated by the Central Bank.
As 9/11 stunned America, Musharraf ditched Afghanistan’s Taliban and became a faithful ally of the Bush administration. This helped in easing global pressures on Pakistan. It led to a wave of capital inflows, and Aziz took the credit for it. Pakistan sent strong signals to the US and others that it was pursuing ‘responsible management’ initiatives, and succeeded in wooing foreign investors.
Many contend that this happened because America wanted to help Pakistan. Yet another factor that aided the inflows was due to the rise in global oil prices in 2003, which forced Middle East investors to seek new geographies where they could invest in. Fortunately, they also chose Pakistan. Post 2003, Pakistan boosted public investment and this spurred growth. But this had happened in the past and does not point to any miracle by Aziz and his colleagues.
The capital inflows resulted in a consumer-spending boom. It led to huge investments in real estate and stock market. Aziz boasted that the growing sales of bikes, mobiles and other gadgets indicated prosperity of the middle and lower-middle classes. Critics think that all emerging markets gained from global inflows, which led to a rise in domestic prices of food products, and materialistic consumerism is a global phenomenon, not unique to Pakistan.
Now that Aziz is out, the challenges before Pakistan include the 7% unemployment rate leading to a fear of lack of jobs, a dissatisfied intelligentsia, the possible impact of the downturn in the US economy, and the manner in which public assets are being sold to reduce deficit. One reason behind the ousting of Chief Justice Iftikhar Muhammad Chaudhry was his undoing of the privatisation of Pakistan Steel Mills at throwaway prices, a step taken on behalf of Aziz.
Ironically, Aziz’s achievements and criticisms remind us of Singh, who is facing similar pressures. No doubt, the two have earned their place in history as leaders upon whom greatness was probably thrust. Yet, they will share one common link – both owe their office to some one else. For Singh, it is Narashima Rao and Sonia Gandhi. For Aziz, it is Musharraf. Thereby hangs the tale of two neighbours, and the paths they have chosen.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
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