NO matter how impassioned his appeals to the nation to look on the bright side of things, Finance Minister Ishaq Dar, who presented the Economic Survey yesterday, cannot gloss over the fact that the growth revival he and his government are touting as their achievement is accompanied by an equally rapid and intensifying growth of vulnerabilities. What now remains to be seen is which of these two — revival or vulnerabilities — will eventually win. The revival of the growth process is most visible in the headline GDP figure that was recorded at 5.3pc this year, climbing above the 5pc level for the first time in a decade. The chief vulnerability that is haunting this achievement is the current account deficit, which will climb to $8.5bn by the end of the year, compared to $2.5bn last year. We are told to not read too much into this number as it is largely a result of ‘machinery imports’, which once commissioned, will help spur exports and growth, and thereby lead to a reversal of the trend. At the moment, though, all bets are open as to whether or not this prayer will be answered.

Beyond the vulnerabilities, the quality of the growth being touted also needs to be closely examined. Much of the impetus this year has come from agriculture, which has benefited from subsidised fertiliser as part of a package of incentives announced by the government last year, when the sector experienced negative growth. Financial services have also contributed significantly to growth in services, according to the minister, who cited a massive increase in the asset base of banks. How long can the government continue to subsidise fertiliser? How long will the financial system continue to register increases in its asset base considering that the numbers of depositors is not rising and financial inclusion is still a long-haul job? Whereas it is important to acknowledge the growth that has taken place this year, it is equally essential to ask how lasting it will be, particularly in the absence of any large state-led impetus.

The minister made an appeal for a “charter of economy” to help build consensus around key economic policies. This is an old appeal and must receive a positive response. The previous government of the PPP had made this appeal first, and now that it is being echoed by the PML-N, the grounds for a consensus exist. The transition year, leading into the elections, provides the perfect opening to hammer out such a consensus. At a minimum, the charter can revolve around what to do about public-sector enterprises and the future of the regulatory framework. It is high time that this crucial question was addressed, and the political parties showed some maturity towards tackling the enduring problems of the economy. There is still time to make this happen.

Published in Dawn, May 26th, 2017