Last week, the government economic managers as well as spokesmen spent a considerable time to soothe fears among stock and currency markets as well as among general public regarding growing concerns over the state of economy.
Finance Minister Asad Umar interacted with media and the public through social media for at least three times to respond to worries about increasing market volatility, mounting inflation and inflating utilities bills and heaped much of blame on the mismanagement of economy by his predecessors and claimed that the economy has been steered towards the correct path and it would be out of the woods in the near future.
Taking cue from his finance minister, Prime Minister Imran Khan, addressing a public rally in Jamrud, also urged people to be patient with the current hardships and assured that the worst would be over in the next few months.
But there are no signs, as yet, that the government’s repeated assurances are being taken seriously. The dollar which was trading for Rs124 in the interbank in September touched Rs141 on April 5, while in the open market it traded for Rs148 amidst speculations that it might go much higher by the end of fiscal year though finance minister strongly rejected the rumors.
The volatility in the money market forced the government’s top spokesman and information minister Fawad Chaudhary to go on the Twitter to announce that a crackdown is being launched against dollar-hoarders and rumour mongers. But strangely, the State Bank of Pakistan (SBP) as well as foreign exchange dealers expressed surprise over the announcement saying that they were not aware of any such move.
The development shows that there is either lack of communication and coordination among the stakeholders dealing with the situation or such important decisions are not taken after proper consultation.
The speculators and rumour mongers do manipulate sentiments in the markets for huge money minting but it is the well thought-out policies and actions of the government which effectively check rumor-mongering and bring stability in the markets.
Pakistan’s economy, no doubt, was in dire straits when the PTI government came into power but lack of proper understanding about the gravity of the problem, delayed decision-making and uncalled for rhetoric by the government leaders aggravated the situation.
Even if one believes the words of Prime Minister that his team came to know about the gravity of the situation only after it assumed the power, it would have been better for his ministers and aides to have refrained from giving bombastic statements which played a significant role in shaking the market sentiments.
It looks strange that the government riding on misplaced nationalistic fervors was ruling out possibility of “begging” for an IMF bailout deal in the beginning is now expressing fears that the country runs risk of going bankrupt if it does not seek help. Taking populist position on critical issues like economy by a political party while in opposition is understandable but it should not take long for the political party to shun populism and adopt realistic position on such issues as soon as it comes into power.
Moreover, it is becoming increasingly stale for the government leaders for giving blow-by-blow comparisons of their performance with that of their predecessors. They should better concentrate on their own work and try to assuage growing uncertainty in the country through actions rather than rhetoric.
The finance minister should leave it to the political spokesmen of the government to tackle the opposition onslaught and he should counter the opposition’s campaign with his policy measures and action instead of indulging in political point-scoring and rhetoric.
The upcoming talks with the Paris-based Financial Action Task Force (FATF) on steps to curb finances for the terrorist groups and money laundering is a major challenge for the government and there are indications that the fate of these talks would weigh heavily on the success of negotiations for a bailout package with the IMF.
The government needs to take the political parties represented in the parliament into confidence about its economic strategy as it would not only provide it the much-needed political support at home but would also strengthen its hands in negotiations with the international interlocutors.
But unfortunately it looks that the petty politics has taken precedence on all other considerations.
At a time when the opposition is crying hoarse over government action against militant groups, whether the world would believe government assurances?
Now instead of placating the concerns of the political leadership, the government leaders are more interested in inflaming tensions by indulging in blame game.
Foreign Minister Shah Mehmood Qureshi, a saner voice in the government ranks, very rightly invited the opposition for their input to make government’s strategy to deal with the militant groups more effective but these words need to be translated into reality.
Pakistan’s challenges at the foreign, economic and security fronts are very grave and these could not be tackled by the government or any political party on its own and need a concerted coordination among the entire political leadership and stakeholders.
The government enjoys a razor-thin majority in the parliament and it could not push its legislative business through the parliament without the support of the opposition.
Therefore, instead of ratcheting up tensions, the government needs to establish a working relationship with the opposition to ensure smooth functioning of the parliament.
The government is heading into talks with the FATF and IMF but so far there has not been any useful debate on these two important issues.
The government needs to brief the parliament on its strategy to handle these matters and should not hesitate from incorporating good proposals from the opposition.
The initiative of easing tension inside the parliament should come from no less a person than the Prime Minister himself as that is the only way that could force all competing lobbies in the government ranks to put their weight behind the Prime Minister’s strategy. So far, there are no signs that such an initiative from the government side is forthcoming but sooner or later this step has to be taken failing which the country could plunge into another round of political instability.
The writer is a senior journalist based in Islamabad