And an unmoved finance ministry
If the present, and the future, is anything like the past, few shivers would have run down spines in the finance ministry over the 92pc increase in the current account deficit in the first two months of the current fiscal (year-on-year). This means that the slightest glitch in exports and remittances can expose the brittleness of our balance of payments sooner than Dar sb can give himself another pat on the back for restoring the economy. So far weak oil has helped keep a lid on expenses, but hoping to ride Brent for anything beyond the near term amounts to irrational expectations, if market wisdom is anything to go by.
Suddenly the PM’s sudden attention to exports recently makes a lot more sense. Time was coming when the stagnating economy, despite the conducive fiscal environment, would have had to be explained to an electorate gearing up for the big vote. And preempting the earnings paralysis makes as much sense as any policy explaining zero progress on exports and taxes; hence the slap on the wrists, of sorts, delivered to the commerce minister. But that was it. There’s been nothing since, especially not from the commerce minister.
Again, if the past is a good guide, one can expect PML-N’s campaign to make big promises regarding the balance of payments. They will make fresh promises of expanding the tax net and quadrupling exports, etc. But just how and why they are able to waltz through the cycle, once in power, while completely sidelining revenue, is something of a mystery. One reason is the press’s inability to keep the business side of government in check. Another, of course, is the opposition hell bent on removing the sitting government rather than act like the legitimate opposition. It will, therefore, take a lot more than a stable growth rate and big promises to turn the deficit around.