Azadi March-Who are the winners and who are the Looser

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Muhammad Arif
Muhammad Arif: Chairman Centre of Advisory Services for Islamic Banking and Finance (CAIF), Former Head of FSCD SBP, Former Head of Research ArifHabib Investments and Member IFSB Task Force for development of Islamic Money Market, Former Member of Access to Justice Fund Supreme Court of Pakistan.

Government and Opposition are locked in a conflict and neither side is ready to budge an inch from its position.

Holding reins of a mammoth crowd in the federal capital and having support of the mainstream opposition parties, Maulana Fazlur Rehman has thrown a challenge on the government. He is there to seek resignation from a sitting prime minister, hurling threats of marching towards the Prime Minister House in case his demand is not met. He also intends to hold a prolonged sit-in till acceptance of his demands. Fazl extends sit-in, threatens to spread protest nationwide 

On the other hand, the government has also declared in unequivocal terms that it will not succumb to the pressure, though it has engaged its team to negotiate with the Opposition parties to settle the issues.

In the high-stakes political battle, it is time of acute stress. Nobody knows for certain who would eventually emerge victorious in this battle of nerves which may prolong over several days. But for sure nobody is taking any position on peoples issues.

To a straightforward calculation, the winners would include PTI as they would find some space to remain, Establishment would get an edge as for remaining unchallenged, PPP would get benefit in form of getting some strength for their Sind government, PML N would get benefit on getting some relief for their leaders, Moulana Fazlur Rehman would get benefit on getting recognition as main political party on the street, than who is the looser. Its straightforward answer is people of Pakistan as coming days are going to be non bearable for them.

For 2019 Global growth has a forecast of 3.0 percent its lowest level since 2008–09 and a 0.3 percentage point downgrades from the April 2019 World Economic Outlook. Growth is projected to pick up to 3.4 percent in 2020 (a 0.2 percentage point downward revision compared with April), reflecting primarily a projected improvement in economic performance in a number of emerging markets in Latin America, the Middle East, and emerging and developing Europe that are under macroeconomic strain.

Yet, with uncertainty about prospects for several of these countries, a projected slowdown in China and the United States, and prominent downside risks, a much more subdued pace of global activity could well materialize.

Over the past year, global growth has fallen sharply. Among advanced economies, the weakening has been broad based, affecting major economies (the United States and especially the euro area) and smaller Asian advanced economies. The slowdown in activity has been even more pronounced across emerging market and developing economies, including Brazil, China, India, Mexico, and Russia, as well as a few economies suffering macroeconomic and financial stress.

However the impact on growth in the Middle East, North Africa including Pakistan (MENAP) region from global headwinds looks to remain muted. But their growth also remains too low to meet the needs of growing populations, while risks to the outlook have increased. They include global trade uncertainties, volatile oil prices, geopolitical tensions, and domestic vulnerabilities in some of these countries.

To forestall such an outcome, policies are needed in Countries like Pakistan for defusing trade tensions, reinvigorating multilateral cooperation, and providing timely support to economic activity. To strengthen resilience, policymakers should address financial vulnerabilities that pose risks to growth in the medium term. Making growth more inclusive, which is essential for securing better economic prospects for all, should remain an overarching goal.

However with GDP growth in Pakistan remaining below 3% and inflation above 13%, unemployment and poverty would increase. The boasting by PTI government that trade deficit has been reduced has mainly come from reduction in imports. This would obviously impact the GDP growth to come down.

To PTI supporters’ economic mess has occurred due to excessive borrowings of the previous governments but the figures and facts tell another story. The pace of debt accumulation in fact accelerated in FY19. In absolute terms, Pakistan’s total debt and liabilities (TDL) increased by Rs 10.3 trillion, which was more than twice the accumulation in FY18. Despite high deficit in FY19, its contribution to the overall debt accumulation was limited to only a third; the rest was attributed to: (I) an upward revaluation of existing stock of external debt following the depreciation of the Pak rupee; (ii) foreign exchange inflows from Saudi Arabia, UAE and Qatar, for balance of payments support; and (iii) government borrowing over and above the budgetary requirements that remained in the deposits with the banking system.

Hamad Azhar of PTI government is appreciating his government policies with tweets of Imran Khan that trade deficit have come down by more than 30%. But they are not telling that this has happened mainly due to reduction in imports that would further slow down GDP and finally its affect would come on revenue generation that would also go down. Further in view of rising inflation, how country can go for better life, better employment, better education and for any further development. Even this year due to PKR depreciation (government is appreciating); State Bank has sustained billions of loss first time in the history of Pakistan.

Then comes the people of Pakistan where with rising inflation, government has reduced profit of NSS for old age and retired persons by 2% and has increase oil prices in wake of stable or reduced oil prices in the world. For these acts of clerks borrowed from IMF whether Hamad Azhar would also come forward to say something.

So according to prevailing facts and economic figures the actual losers are the people of Pakistan and not the stakeholders of Azadi March.

Indicators Pakistan Data-Financial Years
2000-15 16 17 18 19 20
Real GDP growth in % 4.3 4.6 5.2 5.5 3.3 2.4
GDP size $ in billions 158.7 278.7 304.6 314.6
CPI Year average growth in % 8.5 2.9 4.1 3.9 7.3 13.0
Fiscal Balance % of GDP -4.7 -4.4 -5.8 -6.4 -8.8 -7.4
Total Revenue% of GDP 13.4 15.3 15,5 15.1 12.7
Total Government Gross Debt % of GDP 63.9 67.6 67.0 71.1 76.7 78.6
Exports $ in billions 21.5 27.4 27.5 30.0 30.2 32.5
Imports $ in billions 32.8 50.1 58.5 67.8 69.2 59.5
Current Account Balance $ in billions -2.8 -4.9 -12.6 -19.9 -13.2
Figures from IMF and world Bank

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