The government recently announced a tax amnesty scheme in order to whiten the black money. It’s on record that Khan has vehemently opposed such schemes when he was in opposition arguing these were meant to protect corrupt people.
The Pakistan Tehreek-e-Insaf (PTI) government undoubtedly inherited an economy in crisis. The country was facing an imminent balance of payment crisis because of a massive current account deficit amounting to over $19 billion.
The exports were totally stagnant, while the import bill was skyrocketing.
Most of the economic indicators were showing negative trend. It is also true that the deep-rooted as well as long-running malaise is afflicting our economy.
But nine months are enough for a government to at least put the economy on the right direction. This period is crucial for any government to take bold steps because as the time passes in a country like Pakistan, new challenges and crises crop up, which easily drift the government’s attention from the more pressing issues.
The economic data recently released by the State Bank of Pakistan and the ministry of finance depict a horrifying picture.
The fiscal deficit in the first three quarters of the financial year stands a five percent of the GDP, the highest in a decade, meaning the government has no other option but to rely heavily on high taxation measures.
The rupee was heavily devalued and now has been left at the mercy of market forces. It was accompanied by hefty financial packages by the government in the hope that these would give a boost to exports. But the exports failed to pick up at the expected pace.
The government is taking credit of bringing down the trade deficit by showing a decline in imports and everyone knows it has more to do with a slowdown in economy than with the ruling regime’s economic policies and measures.
The inflation is skyrocketing and there are fears the prices will hike further because of rising petroleum prices and a higher interest rate.
The foreign direct investment almost halved in this period. Now that the government is heading towards completion of its first year in office, it is in the process of overhauling its economic team.
After the shocking removal of Asad Umar as finance minister and replacement of the central bank governor and chairman of the Federal Bureau of Revenue, the other members of the economic team are either resigning or being removed by the government.
Haroon Sharif, chairman Board of Investment, suddenly announced his resignation complaining about the status-quo in the government machinery.
It was immediately followed by the news that the finance secretary Yunus Dagha has been removed. All this happened when the government was in the process of finalising the most important loan deal with the International Monetary Fund (IMF).
The new team may take some time to settle down meaning that some valuable time that would have seen the things going would be wasted in administrative issues.
Traditionally, we have blamed bureaucracy for creating hurdles in decision-making and then their implementation and it is true to some extent but in this case indecisiveness as well as misplaced priorities on the part of the political leadership should also share the blame for current mess.
Instead of focusing attention on finding a tangible solution to the challenges faced by the country, Prime Minister Imran Khan personally launched a robust public campaign to highlight corruption as the first or rather the only problem faced by the country and gave the impression that his political rivals are the only corrupt people in the country.
Corruption is undoubtedly a major issue in Pakistan and the previous rulers could not be absolved for their failure to tackle it and they do face charges in this regard but it is for the state institutions, set up for this purpose, to deal with these cases and they are the proper forums where these issues should be raised.
Ironically, the government has not taken any measure that is different from the ones employed its predecessors to deal with this issue in a serious manner.
Ironically, at times it has followed in the footsteps of its predecessors and took measures, which, it previously alleged would promote corruption. The government recently announced a tax amnesty scheme in order to whiten the black money.
It’s on record that Khan has vehemently opposed such schemes when he was in opposition arguing these were meant to protect corrupt people.
The government should let the relevant forums and courts to decide these cases and instead should improve working relations with the opposition to create a congenial atmosphere where challenges faced by the country could be amicably handled. So far, the government seems in no mood to bring down political temperature in the country.
It seems a team of technocrats is being put together to handle the economic issues.
This team would practically not be answerable to parliament, and the government believes that it could address the pressing economic issues this way.
However, the government should know that it would need legislation for the execution of these decisions and since it does not enjoy comfortable majority in the parliament it has to rely on the support from opposition to get legislation passed from the parliament.
Moreover, in a democratic setup decision-making could not be done by ignoring parliament. The opposition has been pressing the government to bring the proposed IMF deal before the parliament’s committee but this demand has not been met so far.
Asad Umar, the first finance minister of the PTI government and newly-installed head of the National Assembly’s standing committee on finance, has also made the similar demand.
The economic challenges for Pakistan are deepening with each passing day.
The government is required to take tough economic decisions in the coming months which could stir public resentment.
Such painful decisions could only be sold to the public if they enjoyed a strong political support, failing which they could give rise to a political turmoil.
Abdul Hafeez Sheikh, the current de facto finance minister, had faced this situation, while serving at the same position during Pakistan People’s Party (PPP) government, when Pakistan had to quit the IMF agreement half-way through the program for political reasons.
It is, therefore, advisable for the government to reach out to the political forces to ensure political stability in the country before it tackles serious economic issues.
The writer is a senior journalist based in Islamabad
