Trumping of rupee by dollar

While the pummel of the rupee by dollar is continuing the government wringing of the hands in opaqueness is frustrating. The predictable accumulative impact may be terrifying as the poor masses have no strength to brace the cascade of resultant ravages of inflation. The opposition parties are getting ready to bring the people to the street to take on the government full-throttled for pushing the economy of the country to the land’s end. The earlier challenge of the PTI leadership to extend the courtesy of offering container to the opposition may be taken seriously with counter offer to the PTI to hold public rally in the face of the outpouring of public wrath triggered by the hellfire of price hike. The culmination of (IMF) staff level approval of the financial support programme also hinges on the approval of its Board and on the endorsement of (FATF) suggesting the uncertainty may continue to engulf the economy with calamitous consequences.

The recently appointed Financial Adviser Dr. Hafeez Shaikh’s frank and honest confession of the unprecedented critical condition of the economy is quite in contrast to the earlier statements of ruling party top leaders’ boasting that the economy was out of woods. Indeed, their reticence could not withstand for longer time as truth had to overtake it sooner than later. The credibility of the government leadership seemingly has plummeted tearing down its political capital brick by brick. As such, people may not heed to its request of giving two more years to see the surreal improvement in their collective and individual lives that was to see the light of the day after six months as per earlier promise. Mandarins seem oblivious of the people introspection who judge you from what you deliver not what you say.

Reportedly Bloomberg last week judged Pakistan’s currency as the worst performer in Asia. That is true. The trading of dollars at the rate of above Rs150 in open market confirmed the assessment. It was not based on rancor but on the determination of market forces those were largely beyond the manipulation notwithstanding the official intrusion to control the slide. The news that the prime minister had constituted a high level committee to pre-empt the decline of the value of rupee against dollar smacked of the morbidity of the forward looking vision of the government mired exponentially in bad timings of grotesque proportion. Ironically, the setting up of the committee and the prime minister’s meeting with the representatives of money dealers remained inconsequential because the rupee continued losing its value in the market. The tactics of playing to the galley did not yield any result of official liking because the market forces and the law of sustainability were unforgiving and the cosmetic measures had no chance of succeeding to stem the depredation or otherwise.

The leadership of the incumbent government seems not only incompetent but also utterly clueless to address the economic mess of the country. Their constant hammering of the blame on the previous government as responsible for the economic meltdown is now wearing thin after the PTI government has completed more than nine months in the office. The cycle of law of diminishing return has come full circle with no more allowance of benefit of doubt to the government. Their projection of indictment might have sounded convincing if the economy had registered a degree of turnaround with positive trends. Instead signs of terminal decline are blinking. The news of bloodbath of the country’s stock exchange during the last week has been making headlines in the news media pretty regularly. It seems nothing is moving in the right direction in the field of economy despite of taking desperate steps in quick succession allegorical to knee-jerk reaction. Those are largely deemed as an exercise in futility if evaluated in the context of cost-benefit analysis. Unfortunately, there are grim feelings in the belly right across the country that the economy is heading to precipice and the nightmarish denouement may be drawing closer, God forbid!

The perception of PTI leadership is simply not cut out for getting the economy out of economic morass has been flying thick and fast as the general sense of paralysis gripping the county is continuing poignantly. The state of affairs may not be tenable for long as specter of economic apocalypse looms larger with the passing of every day. Sadly, the government is deeply engaged in wild goose chase rather spending its energies for useful purpose to make the lives of the poor masses comfortable who have been facing the price hike since this government took the reign of the country. Who will stand with this government when the poor people increasingly in large number go to bed with empty stomach? Hungry people are angry people ready to catch the rulers by their collar. Their patience may be running out that seems in the close proximity to cross the threshold. ‘Beware the ideas of march’.

The dithering and indecisiveness of the mandarins have taken the toll on the economy of the country. The government’s economic and policy planners were pretty sure right from the beginning of the indispensability of seeking the (IMF) financial support programme and yet inordinate procrastination was beyond comprehension. The delay did not send positive signals to the national and international capital market and the resultant uncertainty plunged the knife deep into the economy catapulting the tailspin situation. Pakistan economic policy planners’ indecisiveness of Hamlet, prince of Denmark, ‘to be or not to be that is the question’ was both pitiable and deplorable that had eclipsed the country’s economy to the almost tether end -- a prelude to pauperisation and marginalisation of the large number of people. The hope of better days during this government may seem a fainted hope in the face of their grumpiness juxtaposed with inaptitude and inexperience.

The economy of the country is seemingly on the edge of precipice and the government’s endeavours to rectify the situation are not synchronizing with the daunting challenge. The good news from the economic front has almost dried up. Now, the news of dollar’s trumping of the rupee gets high key publicity in the news media for being news worthy. The expected GDP growth during the next couple of years will be the lowest with big margin in this part of the region. Revenue generations have flopped miserably with Rs350 billion shortfall during the nine months of this government. Inflation, as predicted by notable economists and observers, may touch double digit any time soon making the living of the poor masses a hell courtesy of “Nia-Pakistan” of PTI that used to boast “Tabdeeli” would commence the flow of milk and honey within six months. The dream of better days for the poor masses has been crushed as people seemingly may have been cursing their own choice to support the party. The formidable promoters of the incumbent government may also be repenting now. But the irreparable damage may have been inflicted already due to resultant political instability thus qualifying all of them to be brought to the book to face the consequences of their crass shenanigans.

The statistics and the trend of the economy predict about four million people may go below the poverty line during the next couple of years. The unemployment will also increase and the PTI leadership claim of creating ten million jobs may be perceived as a hoax bordering on the rude joke. The (IMF) reported financial support programme’s stringent conditonalities may break the hell of inflation loose as the PTI government has almost outsourced the county’s economy to the (IMF). This narrative gets credence after going through the reported terms of reference of the financial package of 6 billion dollars. It has devil in details in the form of the implementation of the ‘prior conditions’. For example, the government has agreed to further increase the electricity and gas tariff to generate additional Rs700 million although the government had already increased the tariff on these utilities to the extent of 33%. It means, the additional tariff in pursuance of the (IMF) programme will substantially increase the cost of doing business in this country making the country’s industry less competitive as a collateral outcome. The slippery ground of Pakistani currency even before approval of the package by the (IMF) Board is pointing to the lamentable prognosis.

The hanging sword of (FATF) may nullify the whole financial support programme if Pakistan fails to satisfy the international community of the measures taken to comprehensively contain terror financing. China, Saudi Arabia and UAE have to endorse as underwriters. The Asia Pacific Group (APG) piercing reservations during its meeting in China must have sent the alarm bell ringing in Islamabad that the (IMF) may have the political agenda of the major political players led by India. The Pakistani delegation though presented the case skillfully by putting across the recent measures taken by the government to circumvent the terror financing thoroughly and comprehensively. Pakistan has no strategy to fall back upon if the international community is not convinced of the veracity of our endeavours. It is hoped that the Pakistan government is cognizant of the consequences and therefore must have spared no stone unturned in preparing the case with utmost sincerity and commitment.

Tail piece: Heartfelt condolence on the passing away of young son of Qamar Zaman Kaira, PPP President, Punjab. Nothing is more painful for parents than losing young son in a road accident. Heartbreaking photo of the shattered father paying last affectionate bidding farewell rolled out tears in every eye. People deeply share grief.

muhammadshaheedi@yahoo.com