Money Matters

Grave challenges!

Money Matters
By Zeeshan Haider
Mon, 09, 20

The disease COVID-19 caused by the new coronavirus has not been eliminated, but it no longer dominates international news headlines.

The disease COVID-19 caused by the new coronavirus has not been eliminated, but it no longer dominates international news headlines.

The pandemic too has been effectively curbed in Pakistan and much of the economic activity has been resumed in the country.

Prime Minister Imran Khan’s government takes credit for introducing the concept of ‘smart lockdown’ to the world while the sword of the pandemic is still dangling over much of the developed countries, particularly the United States.

Our government is jubilant that its strategy to deal with the pandemic without crippling the economy through watertight lockdown has successfully worked and highlights rising figures of foreign remittances as one of the indicators of its success.

According to the State Bank of Pakistan, the remittances have exceeded two billion dollars mark for the third consecutive month in September.

In August, $2.095 billion were received in foreign remittances registering a year-on-year growth of 24.4 percent as compared to August last year.

According to the central bank, this persistent rise is the result of increased efforts under Pakistan Remittances Initiative to encourage expat Pakistanis to send their money through official channels as businesses reopen in the Middle East, Europe and the United States.

For a country like Pakistan, increase in remittances which significantly contribute to the foreign reserves is a welcome sign. But such short-term or inconsistent trends should not be construed as the economy strengthening.

A similar euphoria was also shown by the government leaders when exports showed some improvement after the lifting of the lockdown and opening of the economy. That euphoria evaporated when exports tumbled around 20 percent in August from the preceding months.

The government has not officially released August export figures, but the prime minister’s advisor on commerce, Abdul Razzak Daud in his tweet expressed fears that rains have delayed transportation of export consignments, which would cause decrease in exports for the month.

Pakistan’s economy has deep rooted woes which could only be addressed through genuine and drastic measures and not through cosmetic steps.

The government leaders have attributed the fall in exports to the massive rains particularly in the country’s commercial hub, where economic activity almost halted after record-breaking showers.

If that is the case then the government needs to take all possible measures to ensure that economic activity does not cripple again following warning by Energy Minister Omar Ayub Khan that Sindh could face massive gas shortages during winter.

It seems that serious economic issues are being victim of petty political issues and with tensions seem to be rising between the government and opposition there is all likelihood that the much-needed economic reforms would be put on the back burner.

The world economy was already in recession that was deepened by the COVID-19 pandemic.

It is a challenging situation for the developing countries, which need to develop homegrown strategies to address their economic grievances.

The present government signed a bailout package deal with the International Monetary Fund (IMF) after a long resistance and succeeded to evade an immediate balance of payment crisis, but it should tighten the belt to revive the deal which was practically suspended during the pandemic.

It needs to avoid taking populist measures. Rather it should not be shy of taking painful measures to put the economy on the right track.

Inflation is a major concern for the general public. The prices of daily use commodities like flour and sugar have sky-rocketed, but so far no effective strategy has been framed to tackle this issue.

The present government came into power with a slogan of “change” and many people had expected that it would invent novel ideas and new strategies to deal with the challenges faced by Pakistan, particularly on the economic front. But, so far, it has not introduced any new and innovative ideas to tackle these challenges and has tried the same much repeated policies from borrowing money from the IMF to tax amnesty schemes, which itself criticised when in opposition.

The success of any economic strategy hinges on political stability in the country.

The present government does not face any imminent threat from the fractured opposition but continuous tension could detract the government from focusing on the real issues faced by the country.

It is evident from the way the highly important legislation relating to Financial Action Task Force (FATF) was done in the parliament.

The FATF-related laws were crucial, but no serious attempt was made by the government to convince the opposition to extend its cooperation in this regard.

Instead, the bills were bulldozed by the government through the parliament without any constructive debate on the bill in the absence of opposition, which boycotted the session to protest that it was not being allowed to hold debate. Therefore, it is better for the government to take initiative to bring down temperatures.

It is ironical that prime minister himself takes the lead in spoiling ties with the opposition. Such attitude then emboldens the hawkish elements within the government ranks to aggravate the situation.

Prime minister’s single-point agenda of accountability has not produced any desired results. Rather it is now widely seen as a witch-hunt targeting opposition figures that has hardly hit any government leader. In Khawaja brothers’ case verdict, even Supreme Court has raised questions on the working of the National Accountability Bureau.

The government is required to make the accountability process impartial, far and transparent for which it needs the support of the opposition.

The government also needs the opposition’s help in taking forward its economic agenda like the privatisation process. Previous governments have failed to carry out any effective privatisation mainly because of poor or no support from the opposition.

But so far the government seems to be in no mood to engage the opposition in any legislative business. Although, speaking to the National Assembly speaker last week, the prime minister said he is ready to take political parties represented in the parliament along in the law-making process.

Time will tell whether any practical steps are taken to turn these words into deeds.

The writer is a senior journalist based in Islamabad