- And the dangers it poses
The most urgent issue that Pakistan faces today is that of balance of payments. Foreign exchange reserves suffered one of their sharpest drops hitting the lowest level in four years following a decline of $627.7 million to $8.4 billion at the end of last month. What worries many is that despite being in power for more than a month and a half the PTI government has no plan to deal with the most crucial economic challenge. The PTI leadership seems to be living on hopes and expectations. Finance Minister Asad Umar said that the government is currently working on all options including an agreement with International Monetary Fund in addition to bilateral borrowings from China and Saudi Arabia. However visits by Chinese and Saudi delegations have not yielded anything concrete so far. There were conjectures about the Saudi government having agreed to provide oil on deferred payments till the petroleum minister told the media that he was stopped by ‘high-ups’ from discussing oil supply on deferred payment with the Saudi delegation.
Important economic decisions have to be taken at the earliest because delays involve costs. The government has withdrawn part of the subsides on power and gas. The IMF however thinks the rise in prices is insufficient. While the Pakistani currency has been devalued thrice this year, with dropping forex reserves it would be difficult to manage the rupee at the current level. The IMF has also stressed the need for more flexible exchange rate.
PM Imran Khan would do well to rein in his China bashers before visiting Beijing. One of his less refined team members gleefully told a Senate Committee that the rising tension between the US and China over trade tariffs was a good sign for Pakistan as it would place us in a better negotiating position.
In months to come the common man will start feeling the pain of the austerity measures. The government needs to educate the common man about the need for its austerity policy. Soon most of the people will forget the sins committed by the earlier governments and start judging the present one by its own performance. Time act as the party in power.
