Macroeconomic improvements good - but slow reforms in government, in regulation and within the ‘real economy’ retard investment & growth rates, hinder exports and undermine fiscal/structural sustainability of growth
Flow of FDI inflows now under threat, diaspora remittances up, but insufficient ‘real economy’ investment opportunities as final destination – consumer imports sucked in, savings rates low
Full-speed reforms across government needed, but gridlocked due to political uncertainty - helps the ‘reform resistance’ & ‘project silos’. Key decentralisation suffers from ‘unintended consequences’….
BUT….political reform gridlocked by constitutional-political structures and the President’s need to please too many masters
Role of Tribal border (Afghan) areas and relationship with ‘The West’ is critical for political and economic reform
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