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Friday January 21, 2022

Fool’s paradise

January 14, 2022

LAHORE: Economy is going down, inflation is rising, and International Monetary Fund (IMF) Board has postponed the review of Pakistan’s loan programme to the last week of January. Exports are under pressure, imports are still high, and nothing is going Pakistan’s way.

Still there is buoyancy in ministries of finance, commerce, and energy. Perhaps those at the helm of affairs are seeing things that are invisible to the economists and public at large.

Economics is not a game of chess. The economic indicators reveal everything that is going on. We are acutely deficient on two fronts; those include revenues and foreign exchange.

The government is making last ditch efforts to boost revenues through the mini-budget that is being debated in the assembly. The foreign exchange could be enhanced either through more exports, higher remittances or by curtailing imports.

The state has failed on all three fronts. Exports are declining or at the most stagnant. Remittances have achieved their peak. And the increase in regulatory duties has not cooled down imports, though it did increase revenues.

The state is acutely short of revenues and has agreed to curtail the annual development programme by Rs250 billion. Even that is not enough.

The additional revenue requirements are in the vicinity of three trillion rupees. Even the mini-budget or 27 percent increase in revenues cannot plug that gap.

Rulers are not prepared to cut their extravagant expenses. High salaries and perks are being awarded to appointments made on whims. The rulers claimed massive corruption in the past, but failed to recover any significant amount despite massive witch hunting of opponents.

The government is running away from reality. First it claimed that the prices in Pakistan are the lowest in the world. When the public refused to buy this, they say that inflation is a global phenomenon and the government cannot do anything in this regard.

They parade the sales of a higher number of luxury cars as a sign of influence without realising that hardly one percent of the population has access to even the smallest car.

The affluence in society is restricted to 5 percent of the population. Only about 30 percent are still able to eat well. Another 25 percent have cut their food intake appreciably, while 40 percent are almost starving or living on alms which are hard to get these days.

The price hikes do not impact the richer segments of society, the traders, or the industrialists. They pass on the impact of increased cost to the consumers.

Sales are impacted, but the actual profits are not. The common men comprising of daily wagers, labourers, those surviving on minimum wages, and even those who earn double the minimum wage are finding it impossible to pull on.

Most are forced to compromise on quality of food, forgo medical treatment, take children out of educational institutions, and stop using electronic gadgets. The reason is that the rates of food have increased, the prices of medicines have tripled, and the monthly fees of educational institutions have also increased.

Tariff of electricity has forced most poor to look for cover. The high petroleum rates have increased the cost of travelling even by public transport.

People at large are living in real misery. Frequent tensions and quarrels in the society are testimony to this fact.

They are more hurt when the rulers take their plight lightly and try to give the impression that the economy is moving up and people are living a comfortable life. They have tried every trick to get their incompetence ignored.

First every ill was blamed on the previous government, then the global economic scenario was their defence, and now the past mantra of blaming previous regimes is again gaining ground. Given that all ills are from the past, people were living more comfortably during the tenures of the previous regimes.

A competent government is expected to make improvements in the lives of the people after coming to power. The first year is always tough when a new government embarks on reforms. Better vibes are visible in the second year and by the end of third year things improve appreciably.

In the case of the present regime, the first year was worse as expected but the performance declined with every passing year. Its third year was the worst and after completion of three years, the plight of the population in general is increasing with every passing month and week.

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