Financial worries

Ishaq Dar now seems to have lost steam. There is no sign of the rupee strengthening against the dollar and sliding below Rs200, and the finance minister’s meetings in Washington have not produced the desired results. The ADB has offered $1.5 billion, but this amount is likely to be consumed in debt servicing. Another bad news is that exports and remittances are showing a downward trend, putting further pressure on the external account. Meanwhile, the SBP reserves have dipped to $7.6 billion, barely sufficient for five weeks of import. Even those funds are not ‘free’ as they represent the short-term deposits obtained from friendly countries.

Ishaq Dar is reluctant to introduce tough measures to bridge the $3 trillion budget gap by taxing the rich and various influential groups that are the party’s support base. Is a government with a limited term willing to implement long-term sustainability fixes? The government prefers political expediency over economic prudence in an attempt not to lose its political capital.

Shoaib A Majeed

Karachi