Dharnas and the economy

Did they really matter?

PTI’s Asad Umar is usually pretty spot-on about the economy. His background helps, of course, and he seems to understand policy implications better than most professionals gracing the political arena. That is why his rebuttal of the government’s claim, that the sit-ins have harmed the economy a great deal, was as important as it was instructive. The stock market jolted for a while. But its phenomenal rise was decoupled from the real economy also, and most of its gains came when the economy was regressing, so the capital market might not be the ideal litmus test about the economy during the protests.

He is also right about large scale manufacturing, which the finance minister glossed over during budget season. It dipped significantly during the government’s first year in office, which invariably translates into a second round effect on export earnings. The growth rate also contracted. And how it took the IMF to prove the government wrong – which actually floated a much higher figure during the budget – would have been embarrassing if popular attention wasn’t fixated on the politics of agitation which was gaining momentum at the time.

It is also no surprise, of course, that failure to move on the energy problem has been cause for numerous economic ills. There has been a staggering 78 per cent increasing in electricity cost, which has not only paralysed households but also dented exports to no small extent, which have fallen 11 per cent in the last year. The government is also, indeed, guilty of massive borrowing owing to its failure to check electricity and gas theft, which has added to the national debt, and subsequent repayment pressures. These are, of course, serious economic problems, which need immediate attention. And a government struggling for survival might not be in a position to give the economy its undivided attention. Yet it was the government’s policies when it was still in the heavy mandate hangover that hurt an already complicated economic position. Rather than blame others for its own problems, the government is advised to take people’s economic problems very seriously. If their worries are added to, more people will come out against those in power.