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

As Pakistan enters in to its second half of 2020, the government is trying to assure its citizens that the country’s politics and economy is out of deep waters. But still at the moment nobody is ready to believe their claims.

With arising crises each day like of PIA, Oil prices, Electricity debacle, Rising prices in the market, Increase in unemployment and finally no firm policy to combat Corona epidemic, confusion is adding in to further confusion. The people are now asking very valid question that what is going to happen next. In this situation PTI wants to involve in JITs, Accountability with no results just to diver people attention from Atta, Sugar, and Petrol crisis.

Whether current government of PTI is going to stay or minus one formula or minus three formulas is going to come in to play. These are the questions.

Everybody knows that who is the most organized and strong force in Pakistan. Apart from ruling the country for more than 40 years it has ruled the country indirectly in the remaining years. Everybody knows that who brought Bhutto, Benazir, Nawaz Sharif and now Imran Khan in to power.

Earlier in 2018 the establishment considered Imran Khan to come in to power in spite of his no experience of the government. It was expected that within time he would refine himself but due to his egoist instinct he gathered those people around him who were not competent so he may enforce his policies without any resistance.

But with the passage of time these surrounding peoples tried to gain strength that started tug of war within PTI. First Jahangir Tareen was thrown out and on various occasions Assad Umer and Fawad Ch has been made targets. Now Minister of civil aviation is on target due to his own mistakes. Economy is in those hands who have been brought from IMF and still they are there as their sincere servants. Sh. Rasheed who has remained part of every government is also there with his daily predictions instead of giving attention to his own ministry i.e. of Railway where many people have died in the last two years due to accidents.

On the other side Opposition is passing through the same situation with PML N divided in to three or four groups i.e. Nawaz Sharif with Marryam, Shabaz Sharif with his clan, Shaid Khakan Abbasi, and Khawaja Asif with no others so strong. PPP is trying to move forward under Bilawal with no comparison to his mother or grandfather Bhutto. Other Parties are just regional or religious groups.

So in this confused situation actual power broker cannot decide that if they get away with Imran Khan than who can be the next.

Election cannot be the solution in the given situation due to corona and in minus one formula get away of Imran means getting away with whole PTI. In case if establishment comes on face than they would have to start with highly tough accountability steps against Mafias that would bring these mafias against establishment and at this moment that does not look good for the country.

So what remains .To continues with Imran Khan in spite of his mafias who are basically supporting his government. Country at the moment cannot get away from IMF and their installed economic in charges.

With support from the International Monetary Fund (IMF), it is now expected that the fiscal year 2019-20 will see an improved current account deficit to the tune of 2.4 percent of GDP. This number stood at 4.8 percent during the last fiscal year and was a key reason for the fast depletion of foreign exchange reserves.

The flexibility allowed in the currency exchange rate and administrative measures also resulted in a sharp reduction in the country’s import bill 2019-20. Unfortunately, the ruling party PTI voter is in no mood to celebrate. While it is said that inflation has started to stabilize, the growth in prices for the ongoing fiscal year is still expected to remain in the double digits at 11.8 percent. According to the former finance minister and economist, Dr. Hafiz A. Pasha, 8 million people have been slipped below the poverty line last year.

With slow technical and regulatory reforms in the gas sector and full cost recovery committed with the IMF, the Oil & Gas Regulatory Authority (OGRA) is proposing immense hikes in the gas and electricity tariff.

So, where from relief can come in 2020? Not from the political side for the time being.

 First, the government will need to use federal and provincial development spending efficiently. Timely releases of funds channeled towards increasing productivity in agriculture and industry could help. Second, the expansion of financial allocation under the Ehsaas program may prove a step in the right direction. However, time is running out as inflation continues to bite harder in the coming days and sooner The SBP would start again raising its discount rate.

Third, the Planning Commission needs to lead a debate and envisage an economic growth road map. Currently, voices from the central bank suggest that Pakistan should not grow beyond 3 to 4 percent due to the import-dependent and debt-induced growth structure of the economy. Such thinking maybe a good diagnosis, but does not provide citizens, and more importantly investors, with a clear idea of how the government wishes to expand the economy and create jobs. If the underlying structure of economic growth needs change, now is the time to think about it and put in place corrective measures.

Some of the economic sins of 2019 will need to be reversed. An expansion in federal ministries and cabinet is never a good idea when the Prime Minister is demanding austerity. There is room to reduce the size of the federal government through the merger of ministries and departments which will save taxpayers money.

Additionally, the parliament is not functioning the way it is supposed to and the Senate couldn’t meet for a long period of time. Therefore, reaching a political consensus on reforms in the energy and loss-making public sector enterprises is proving difficult. Pakistan’s continued stay on the grey-list of the Financial Action Task Force will remain a concern for private investors in the financial sector. The federal and provincial institutions mandated to understand and comply with demands by FATF’s International Cooperation Review Group and Asia Pacific Group will need to demonstrate success on this front.

Finally, one hopes that in 2020, the federal government may have a better plan to remain transparent and communicate stabilization and growth pathways clearly. As the debt burden continues to grow, it is essential to inform citizens if Pakistan has a strategy to manage its debt servicing commitments. The finance ministry may do good to release the much awaited bi-annual reports on debt management.


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