Economic vulnerability

LAHORE: The vulnerability of our foreign exchange reserves is again exposed, as we seek roll over of around $7 billion loans taken from China, the UAE, and Saudi Arabia for another year.

We are not in a position to return these loans on their maturity that were rolled over last year for another year. We also are not on best of terms with at least two countries - the UAE and Kingdom of Saudi Arabia.

In fact, the latter forced Pakistan to return $1 billion of its $3 billion loan a few months ago. Pakistan had to hurriedly borrow the amount from China. We disagreed with the Saudi policy on Kashmir.

Still, the situation has not changed much, as Pakistani authorities are hopeful of getting the loans rolled over for another year.

It is a matter of grave concern that in the last two years we have not been able to add even a dollar in our reserves from our own resources.

All foreign inflows we have received have been consumed. This includes around $22 billion yearly exports, $21 billion yearly remittances, and billions of loans from multilateral creditors such

as the World Bank, International Monetary Fund, and the Asian Development Fund.

The State Bank of Pakistan had already notified that we have added $17 billion foreign loans in the first 22 months of this government that were completed in June 2020.

We do not know whether the deposits provided by three friendly countries to shore up our reserves are loans to the federal government or direct liability of the central bank.

Even after shoring foreign exchange levels on borrowed money, we hardly have reserves to finance only three months of our imports.

We are in a vulnerable position in foreign exchange reserves even though we drastically reduced our current account deficit.

The government touts this as its greatest achievement, ignoring the fact that the measures it has taken has compromised our growth.

It is next to impossible to create real foreign exchange reserves without healthy economic growth.

In the process, we have thrown millions into poverty. Around 1.5 to 2 million workers have lost their jobs. It is not fair to trumpet one positive economic indicator that has jeopardized both growth and jobs.

Economic growth is not the target of this regime. It is interested in throwing its opponents in jails on the charges that remained unproven after years. The vindictiveness is not limited to its political opponents. It encompasses any individual, even media that does not agree with its policies.

Dissent is an intolerable sin, which is evident from the incarnation of Jang Group Chief Mir Shakil ur Rehman in lockup for over 230 days.

The government could not find any wrongdoing from the stubborn editor who refused to toe the government line. They probed his 35 years’ history

and came out with a bogus and time barred case of land allotment. Mir’s ordeal is not an isolated case, but every politician, journalist or businessmen nabbed through the National Accountability Bureau faced the same lifetime probes.

One can imagine the time and efforts consumed in fabricating even frivolous charges to satisfy their ego. We might have similar efforts been done for improving the economy and introducing reforms, besides reigning in the corrupt elements within the ruling party.

Even a look at the press briefing by an army of ministers and special assistants would show that opponents are the main targets. The ever-increasing edible rates do not bother them.

At first, they conveniently passed on the blame to past rulers. When the electorate rejected this allegation, the blame was shifted to mafias managing the economy. However, when the government's own investigation revealed that the mafias were sitting within its ranks, the blame was shifted to non-cooperative bureaucracy.

The prices continued to register increase during the efforts to shift the blame to others instead of admitting governments’ incompetence.

Now a new mantra has been introduced by questioning the patriotic credentials of dissents.

Again, it includes political opponents, as well as journalists. This regular behaviour clearly reveals that the economic growth is still not the priority of this government.

To please some segments of the society it is providing subsidies that the government cannot afford. There would be no need for subsidies if the governance is taken to a higher level and corruption at all levels is strictly checked and addressed.

The deteriorating economic conditions are in sharp contrast to the affluence that other countries of the region are experiencing.

The past two decades belonged to Asia led by China, India, Indonesia, Bangladesh, Cambodia and even Myanmar. It is unfortunate that despite being located close to these economies, we are not part of them.