Time to be a leader

The rupee has seen a severe beating in the last few days and the rate surged to Rs168 – an increase of Rs13-14 during a week or so. It exposes the weak edifice on which the economy and the exchange rate rest. The fallout of the coronavirus pandemic and reduction in the interest rate by the SBP triggered the exodus of hot money earlier secured by keeping the interest rate high. Consequently, SBP reserves have dipped below $12 billion. The high interest rate has severely damaged businesses, industries and eroded investments. The government has not unveiled a tangible rescue plan to limit the economic shock other than borrowing from the IMF, ADB and World Bank which have suddenly become generous in the current situation. The government’s economic team looks for quick and easy fixes which do not work. Currently, every Pakistani owes Rs2.3 lakhs as compared with Rs1.2 lakhs in June 2018. The government must engage independent economic experts of the country to formulate a comprehensive, sustainable rescue plan that relies on in-house resource and expertise. The interest rate must be brought down to 6-7 percent. Imports of luxury and unnecessary items must be totally halted to conserve dollars. Ways must be found to keep export-based industries open without endangering lives, lest the exports grind to a halt.

It is easy to be a sportsman and lead a team of 11 individuals, but extremely difficult to become a statesman to lead 220 million souls mostly uneducated and economically deprived. Leadership requires smart ideas and innovative solutions. As the article ‘Lockdown the IMF programme’ (Mar 27) by Abid Hasan suggests, "The prime minister must stop listening to his under-performing economic team who are beholden to the IMF programme. It’s time Pakistan throws everything it has to avoid an L-shaped economic meltdown". This is the time to show great leadership.

Arif Majeed

Karachi