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Thursday March 28, 2024

Managing the economy

By Malik Muhammad Ashraf
November 23, 2019

Managing an economy, particularly of third world countries like Pakistan that suffer from resource constraints and struggle to strike a balance between development and welfare-oriented measures, is an arduous and excruciating exercise. This is more so in view of the vulnerabilities to the ever-changing global economic environment.

Considering these factors and the state of the economy inherited by the PTI government, it is hard to deny that the overall handling of the economy has been quite encouraging.

Almost all the economic indicators that are considered of crucial importance in propelling the economy towards a process of revival and sustained economic growth are showing positive signs after a difficult period when the government had to take some harsh but realistic decisions to rectify some of the economic aberrations and set in train the much-needed economic reforms.

In the first four months of the current financial year, the Pakistan Stock Exchange witnessed an increase of 30.4 percent. In the same period, the stock exchanges of Germany, Sweden, Russia and Ireland registered increases to the tune of 13.9 percent, 14 percent, 16.2 percent and 19.1 percent respectively. Foreign exchange reserves increased by $1117 million, foreign investment in the first quarter witnessed a 238 percent raise and the current account deficit experienced a 73.5 percent reduction during the month of October.

The positive developments in the foregoing indicators also enabled the government to enhance debt payments by 25 percent in the first quarter. They are strong portents in regard to the revival of the economy and might act as a springboard to take the economy on a path to sustained economic development and improvement in the rate of GDP growth.

Some people doubt the sustainability of steps taken by the government, citing increase in the internal and external debt, and feel it could ultimately have a debilitating impact on the economy. As regards loans, one should not lose sight of the fact that it was an indispensable imperative in view of retiring the already taken whopping debts and rectifying the alarming current account and budgetary deficit. The loans were also necessary to meet other pressing needs as well as avoiding a situation of debt default and keeping development projects going.

While the apprehensions of the critics cannot be dismissed lightly, it is pertinent to point out that their argument represents only one side of the equation which is normally based on the assumption that the loans obtained will not be employed on the productive avenues. The fact is that almost all the countries of the world take loans to finance their development and welfare projects and these loans if used prudently on productive avenues not only generate enough resources to pay for themselves but also add considerably to the resource availability of that country. They probably also do not take into account the contribution of the development projects to the overall health of the economy after their completion, particularly the ones under CPEC.

Riding on the successes achieved in the economic sector so far and with focus and commitment, it should not be difficult for the government to trigger fast-track economic growth in the country and ultimately be in a position to give more attention to providing adequate relief to the people and changing their economic situation.

It is unfortunate that the opposition parties have not played their role as required of them in a political dispensation. In democracy, the party in power and those in the opposition are considered two sides of the same coin. The opposition is a government in waiting. Both the ruling party and the opposition, despite their different political agendas, work for the wellbeing of the people and to serve the national interests. But in Pakistan they have invariably focused more on pulling down the incumbent government through unconstitutional means.

If the opposition parties feel that the government in their estimation is not pursuing the right course, they should leave it to the people to be the final arbiters as required under a democratic system. People have given the PTI the mandate to manage the affairs of the state for five years and it should be allowed to complete its tenure without any disruption.

The opposition often complains that the government has made parliament irrelevant. I am afraid that to a great extent they are themselves responsible for this situation. Instead of cooperating with the government to bring required legislation for systemic changes to ensure good governance, they are invariably found creating a rumpus in parliament. The government and opposition need to have a working relationship and focus their energies on promoting national interests and warding off the challenges confronting the nation. In this regard greater responsibility, however, rests with the government. Of late some signs have emerged which point towards a reduction of the tensions between the government and the opposition such as a consensus on the new chairman of the PAC.

The government has also agreed to withdraw the ordinances that were made into law on November 7 by rushing them through without allowing deliberations on them in parliament and adopting a prescribed procedure for their re-introduction in the assembly. The tensions on the production orders of incarcerated parliamentarians belonging to the opposition also seems to be ebbing away. This new spirit needs to be kept up in the national interest.

The country perhaps needs a new social contract and a charter of economy enjoying the support of all stakeholders to winch the country out of this perennial political instability. Economic development needs political stability. The government and the opposition must not lose sight of this imperative.

The writer is a freelance contributor. Email: ashpak10@gmail.com