Dar’s numbers

Finance Minister Ishaq Dar is under pressure after having painted a positive picture of the country’s economy for the last four years. At a personal level, Dar has been facing a fast progressing NAB indictment. But right now, the handling of the country’s economy has come under scrutiny. After the recent public pronouncements regarding the country’s economy, Dar has been summoned before the Senate. An embattled Dar faced the media  on Monday     to allay the fears that have spread  over the country’s economic direction. The biggest claim, of course, was that Pakistan will not need another bail out from the IMF or any other international financial institution. This was in contrast to the latest World Bank report, which painted a dire picture of Pakistan’s foreign reserves and predicted that the country would need another bailout before the end of the year. Dar, though, has declared his satisfaction with Pakistan’s foreign currency reserves of almost Rs13.8 billion.

Dar’s true legacy as a finance minister will only be discovered after he leaves the post. However, the recent revelations that circular debt in the power sector has reached what it was in the PPP era are not encouraging signs. The finance minister’s insistence that the power outages position is better now is more about a question of vantage point. The outages in early April certainly mirrored the worst days of the last PPP government – and it seems that any improvement has come at a large cost to the financial exchequer. Behind the scenes, Dar has asked the finance ministry to work with the World Bank to ensure accurate reporting of economic data. Dar is correct that it is better to arrest downward trends, instead of giving negative messages publically. Asked to explain the increase in debt, he mentioned the increase in military budget. To us, the most important immediate questions are: will Pakistan need another bailout? And will the rupee be devalued? Dar’s answer to both questions remains no. One hopes that this reflects the reality of our economic position.