Seemingly, Dr Sheikh has become an economic convert. Not the worst of practices in times of widespread political switching. But not the best either since he heads the finance ministry. His all-well-on-the-economic-front take halfway through the fiscal, duly appreciated by the president, marks a clear departure from the policy posture he advocated at the start of the fiscal year. And though increasing exports and reduced inflation is a plus for any economy, it is a folly to compare Pakistan’s fresh numbers with last year’s, when the economy was wrongfooted by one exogenous shock after another.
Dr Sheikh no doubt knows, yet chose not to place the 12 per cent year-on-year rise in exports in the context of a long term trend of decreasing exports and increasing imports bloating an already uncomfortable fiscal deficit. That too when the promise of relieving the centre’s Rs4 billion annual drain on account of PSE losses has been ruled out. And since we keep abreast of on-ground rigidities, we will not find fault with any expansion in the tax net, no matter how miniscule, as long as due attention is paid to streamlining tax collection granted to the provinces. The federal government will have to play a central role in building provincial tax collection capacity, or the exercise will not come to fruition. But the boast about government austerity needs to be taken with more than a small pinch of salt. Government claims of reining in budgetary expenditure when it blatantly borrows from the money market amount to insulting public intelligence, and cannot be expected at face value. It is little surprise the finance minister did not mention slashing the growth target.
As things stand, politically correct statements regarding the economy, especially when they mask disturbing trends, suit Dr Sheikh as much as the president. But justifying excesses instead of admitting mistakes is about just as prudent as defending a faulty outlook that deepens political paralysis. This way Islamabad just embitters an already aggrieved electorate.