ISLAMABAD – The reluctance of the political leadership to heed to the advice of its top economic managers has brought them to a point of quitting the government and saving their reputation and credibility internationally, sources told Pakistan Today on Friday.
Finance Minister Dr Abdul Hafeez Shaikh, Planning Commission Deputy Chairman Dr Nadeemul Haq and State Bank of Pakistan Governor Shahid Hafeez Kardar might opt out if the government did not immediately start implementing the economic reforms agreed with the international financial institutions (IFIs), the sources said.
The top three economic managers are already under great pressure as they make commitments with the IFIs and other development partners on behalf of the political govt, which turns its back on its commitments immediately after receiving the soother. “Their international acclaim is under threat and so is their credibility with the donors,” the sources said.
The government is fighting for its survival and has no worries on the fiscal front, while the top economic team’s hands are tied, as without the political consensus they cannot even move on plan B. An IMF team is expected to arrive this month to discuss implementation on the reforms but with a weak government the economic managers would face a tough time to convince the visitors.
Their main worry is the fiscal deficit, which is projected to increase to 7.5 percent of the GDP or Rs 1.2 trillion by the end of the current financial year as compared to the revised budgetary estimate of 4.7 percent of GDP or Rs 812 billion.
They have assured the donors that the government would improve its expenditure management and contain the fiscal deficit. The general subsidies would be replaced by targeted subsidies for vulnerable groups. SBP Governor Shahid Kardar is vocally stressing on constitutional cover to put restrictions on the government’s borrowing from the central bank. Another worry for the economic team is the uncertainty over who makes the key appointments in bureaucracy and public sector entities, sources said, adding that the finance minister and the Planning Commission deputy chairman were totally in the dark on the reshuffle of secretaries in their ministries.
