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September 21, 2019

Feeling good?


September 21, 2019

Contrary to what the media says, PM Imran Khan seems satisfied with the performance of his government in the last one year and he wants us to feel good about the economic situation and overall performance of his government. The government believes, and wants us to believe, that whatever wrong that happened in the last one year is not a result of this government’s policies and decisions, but the fault of previous governments.

The government's economic managers always show us the brighter side of the economic picture. That is part of their job and is also necessary to convince their boss of the justification of their existence. So first, they bring in the feel-good factor in the government and then try to convince the rest of the country to start feeling good about the economy.

It is easier to convince the elite and ruling class to feel good than to convince the poor working masses. The elite is not facing the problems of ordinary people. They are somehow detached from the everyday miseries and problems of common people. That is what Dr Hafeez Sheikh did in his press conference couple of days ago in which he said that the economy was on the right track and its deficits were reducing.

Yes, the deficits in the economy are undoubtedly shrinking, and Dr Hafeez Sheikh is right to point out that the size of the imbalances is reducing. The trade and current account deficits have been reduced. The slowdown in the economy helped reduce imports as demand fell. The falling imports, expensive dollar, lower oil consumption and facility of deferred oil payment from Saudi Arabia contributed towards reducing the current account and trade deficit.

But the question is whether the reduced current account deficit and aggressive tax collection drive is enough to stop the slide of the economy and fix our economic problems. Is it enough to bring in the feel-good factor in the people? Unfortunately, the answer is no. The government is not taking the necessary measures to bring down the rising inflation that is really hurting the poor badly. The prices of food, vegetables and other daily essentials have gone out of the reach of ordinary folk.

Now look at the dark side of the economy. Inflation continues to rise. The government has failed to control prices. The budget deficit has broken all previous records. Foreign investment continues to decline and domestic investment almost came to a halt. Both the industrial and retail sectors are experiencing a slowdown. GDP growth fell to below three percent. Production and exports are almost stagnant. Unemployment is rising. The economic growth rate is continued to fall. The economic slowdown has not been stopped. Business confidence is low, and the overall economic picture looks grim.

The government has two options here. One, put pressure and build a flawed narrative of economic development and growth, although that will not change the ground realities faced by the poor working class. Two, introduce the promised reforms, measures and policies to improve the lives of ordinary people. People will start to feel good when the situation on the ground will improve.

It is impossibly hard for the working masses and the lower middle class to feel good when they cannot feed their family. When they can’t pay inflated electricity bills and school fees. The more than seven million unemployed mostly educated young people cannot feel good without finding jobs. The slowdown in the economy has already made nearly 1.5 million people unemployed in just one year. How can one feel good under these circumstances? Such an impoverished population living without decent housing, public transport, education and health facilities and decent work would certainly find it hard to feel good.

What is needed is to create jobs and economic opportunities. Bring down the rising inflation and price hike. And reform the police and civil administration.

Every Pakistani wants to see the economy improve and recover. Everybody wants to see the fastest growth rate in GDP. Everyone wants jobs, economic opportunities, investment, and better business environment, increased production, new industries and booming economy. Everybody wants to feel that improvement in their day-to-day lives. Everybody will feel the improvement in the economy when their lives will have the same improvement – when their income will increase and they will be able to properly feed themselves.

It would be difficult for even the most competent spin doctor to justify the current economic policies. The media can build a positive image but it certainly cannot change the ground realities. So there is no point in being angry with the media. Instead, the government must change the ground realities.

The writer is a freelance journalist.

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