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Dawn Editorial 31 December 2019

Economy in 2020

THE incoming year will be a decisive one for the economy. The stabilisation that saw a tortured start in 2019 is set to continue, but optimists in the market are anticipating an end to the chokehold of high interest rates and the aggressive taxation drive sometime in the early months of 2020. The growth rate has plummeted while forecasts say the economy should register a growth rate of between 2.5pc to 3.5pc by the end of the fiscal year. Manufacturing has hit one of its lowest ebbs ever, except perhaps for the years immediately following the great crash of 2008, while private investment and business confidence have also been lacklustre. Even as the economy chokes under the stabilisation measures adopted out of necessity by the government in 2019, the incoming year presents some promise of change.
The prime minister has already begun promising a shift in the focus of economic management away from stabilisation towards growth. In multiple forums over the past few weeks, he has declared the economy stable and the time to move towards growth to now be imminent. These words are partially responsible for fuelling a sense of optimism among certain sections of the business community about the new year. If interest rates are to be reduced and the level of government spending, especially on development projects with strong linkages across various sectors of the economy, picks up, a return to growth and reinflation of aggregate demand can spur economic activities quickly. Interestingly however, the prime minister’s finance adviser is a little more circumspect when talking about transitioning to growth, but even he is promising greater dedication of fiscal resources to encourage export-oriented sectors.
Still, a lot depends on how the fiscal numbers turn out and how stable the reserve accumulation that has taken place thus far remains. Business groups are asking when growth will return, whereas the government must ask itself whether we are in a position to afford growth at the moment. The fiscal numbers seem to be improving, even if largely on the back of excruciating expenditure cuts, and reserves had only in recent months reversed a long trend of continuous declines. But if there’s a sudden move to apply the accelerator at this point and reignite domestic demand, the deflation of which is the core aspect of the ongoing stabilisation programme, the same deficits could reappear again. Instead of keeping the focus on growth, the government should present 2020 as the year of reform and outline in detail its plans for the state-owned enterprises, the power sector and the future of administered pricing regimes as well as the overhaul of the regulators to ensure a competitive playing field going forward. More than raw growth, let 2020 be the year the country arrests and reverses the steady erosion of its productivity. That would make for a very happy new year indeed.

 
 

Bustard business

ACCORDING to findings by the Houbara Bustard Commission, the internationally protected migratory bird’s population has dropped noticeably in the past three years in Punjab. Each winter, flocks of houbara bustards descend from Central Asia on the deserts and plains of Pakistan, but their population has been diminishing due to excessive hunting carried out largely by dignitaries from the Middle East. In a single 10-day hunting trip, up to 100 birds are allowed to be killed, but this figure is reportedly exceeded frequently. Consequently, the houbara bustard is placed on the International Union for Conservation of Nature’s Red List. In March, the Lahore High Court had directed the commission to investigate whether the continued hunting of the endangered species was being carried out in a sustainable manner, or if new and stricter conservation policies needed to be initiated to protect their population. For instance, in order to conserve the mountain-dwelling national animal of Pakistan, the markhor, the government issues limited trophy hunting permits each year. Since an outright blanket ban would not prove sustainable, four hunting permits are annually auctioned, and the large sum of money collected is then distributed amongst the local population, with a smaller portion going to the wildlife department. This has helped reduce the illegal hunting of the majestic animal, hunted for its body parts, while simultaneously benefiting the local population. When it comes to the houbara bustard, except for a small increase noted in the Rajanpur-Rojhan area, the findings of the recent report point to how the excessive hunting of the endangered species has negatively impacted its status. While there have been reports of some conservation efforts being carried out, with captured birds being released into the wild by officials from the UAE, clearly these have not been enough to reverse the damage caused over the years.
The issue is also fairly politicised, and often becomes a matter of national sovereignty versus foreign policy compulsions. When the current prime minister was in the opposition, he requested his government in Khyber Pakhtunkhwa to not lift the ban on the hunting of houbara bustards. In 2015, the Supreme Court had placed a ban on the hunting of the houbara bustard, but this was lifted the following year. Yet just last week, special permits were handed to the royal family of Bahrain to hunt the bird in the next hunting season.

 
 

Bangladesh series

THE Bangladesh cricket team’s tour of Pakistan, scheduled to commence from Jan 15, is now facing uncertainty after their cricket board, the BCB, offered to play just three T20s in Pakistan while asking for the two-Test series to be shifted to a neutral venue.
This recent shift in Bangladesh’s stance has clearly upset the Pakistan Cricket Board which has now asked the BCB to explain the reasons for its reluctance to fulfil its obligation under the International Cricket Council’s Future Tours Programme.
The PCB has every right to ask Bangladesh about its non-committal approach, especially after Test cricket returned to Pakistan this month when a full-strength team from Sri Lanka played two Tests in the country, ending a decade-long barren stretch for Pakistan.
The visitors commended the PCB and praised the government for making excellent security arrangements. The incident-free series against Sri Lanka is already beginning to have its impact, with several international teams, including South Africa, England and Australia, now in talks with the PCB for future tours.
The BCB’s stance is thus odd, especially considering that Bangladesh’s under-16 team visited Rawalpindi early this year while its women’s squad also played matches in Lahore following a high-powered visit by a security delegation to Pakistan. The BCB’s chief executive was recently quoted as saying that Bangladesh has to take into account the views of its players and members of team management prior to giving the go-ahead for a Test series.
But the fact is that the security situation has improved after Pakistan’s sustained crackdown on militants, and as the Sri Lankan tour showed, extra care has been taken to ensure the safety of international players. The PCB is still in negotiations with the BCB and is hopeful of a positive outcome.
Besides, the series is also part of the ICC World Test Championship, so the international board is a stakeholder and should make efforts to convince Bangladesh to fulfil its commitment which will be a boost for the game’s future in the region.

 
 
 

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