Sunday May 28, 2023

The curse of inaction

May 19, 2022

Pakistan is facing yet another economic dilemma. The Pakistani rupee has been depreciating fast for the last few weeks against the US dollar; the new government is unable to take tough decisions and remove the fuel subsidy, and our foreign exchange reserves have sunk to a near-default level. If the country defaults on international payments, the flow of imported goods will be disrupted. The government’s inaction is exacerbating uncertainty in the country, resulting in more chaotic economic conditions. Over the last few years, our politicians have not handled the country’s economic concerns effectively. Before the 2018 elections, the PML-N government announced an unsustainable income tax concession for political point scoring. The PTI reduced fuel prices to an unrealistically low level to make political gain. Such tactics are dangerous.

The incumbent government must take difficult economic decisions to save the country from potential unrest. Pakistan needs immediate decisions regarding structural changes in economic policies to avoid the twin budget and current account deficits.

Ejaz Ahmad Magoon (FCA)

Doha, Qatar