New government will have to live up to promises

Pakistan's newly elected government, which began its tenure yesterday with the formal oath-taking of Prime Minister Yousuf Raza Gilani, faces a tough challenge on the economic front.

Gilani's tenure has started a year after President Pervez Musharraf began his series of battles against the senior-most judges, and at a time when Pakistan's politics is surrounded by widespread uncertainty.

On Monday, Gilani's first order as prime minister to seek the release of up to 60 judges arrested under Musharraf's orders, set the pace for more tumultuous times for Pakistan.

For the moment, such political discord may not immediate have an effect on the broad economy. Yesterday, the Karachi stock exchange's representative KSE-100 index rose moderately, leaving the latest political trends largely unnoticed.

For many investors, the concern for the moment is not just the future of politics. Many are worried over the state of the economy itself. Pakistan's position as an oil importing country places it squarely in the ranks of states that are troubled by the fast rise in global oil prices.

There are multiple challenges that emanate from the energy price situation. An obvious one is the extent to which Pakistan's import bill will be affected, which in turn aggravates the country's international trade position and its current account situation.

An equally important challenge will be the need to push ahead aggressively with a robust plan to improve efficiency by urging a greater sense of public participation. So far, Musharraf and politicians loyal to him who have ruled over Pakistan for the past five years have only resorted to lip service by way of encouraging public participation in causes such as energy efficiency.

Energy wastage

Pakistan has a large problem when it comes to wastage of energy resources. By some accounts, up to 40 per cent of electricity from the Water and Power Development Authority - the main company for transmission of energy - is lost before it reaches consumers.

That loss is partly due to inefficiency, although corruption is a factor too. Across the supply network, it is not too difficult to find consumers who routinely grease palms of corrupt officials to supply them electricity. Turning around efficiency within WAPDA could alone reap major dividends for the new government in an area where the previous government's track record has been far from impressive.

There are also major decisions ahead on the construction of large dams for power generation and irrigation purposes. Given that Pakistan's four provinces have never all agreed on some of the most ambitious among such factors, the new government's success will come more by way of pushing ahead with getting all the political stake holders on board. Ultimately, if Gilani and his team manage to oversee a political consensus backing such an initiative, they must will get high marks.

Last but not the least comes the entire issue of overseeing the construction of new gas supply lines from Iran. The last government talked much about this initiative but ultimately did little to actually make it happen.

Other important objectives lie in areas such as reforming the tax collection system and improving productivity in key areas of the economy, notably agriculture and industry. The up side for the new government is that it has the backing of Pakistanis who are visibly tired of Musharraf's rule. The biggest challenge however for Pakistan's new rulers may well be to make certain that they can keep up with their promises and deliver on them.

The writer is a journalist based in Pakistan.