Fiscal, political situation volatile
The rupee hit a record low of 140.24 Friday against the US dollar with more gloomy devaluation anticipated this month as international oil prices showed an upward trend, hitting $60 per barrel recently. Pakistan’s economic managers’ biggest dread, that of rising oil prices, might be coming true and will rattle them as maximum advantage was not taken when the rate was under $30 per barrel. Smugness and inertia prevented timely rectification of glaring macroeconomic deficiencies, which have now multiplied to unmanageable proportions, while a miniscule benefit was passed on to ordinary consumers by rapacious mafias. The worst-case scenario for money and markets is prolonged uncertainty and for that, unfortunately, the new PTI government stands in the dock, as it has inordinately delayed the latest IMF bailout programme urgently needed to bring some order and method to fiscal chaos and drift. While talks with the lending institution still continue behind the scenes, the government has relied in the interim on friendly financial saviours, despite fears among some Pakistanis of underlying geopolitical exactions. With over $1 billion needed to service maturing Eurobonds and loans, and precarious deficits in trade and current accounts, the government will have to pull some rabbits out of its hat pronto or face public wrath as inflation will relentlessly move the bread-basket higher.
This Pakistan Day also witnessed a politically deeply divided nation. The needless and possibly harmful dawdling in the medical treatment of Nawaz Sharif has created much illwill and division between the PTI and PML (N), with both partly to blame for the impasse, while the tempo of fake account cases against the Zardaris has been increased by the National Accountability Bureau, with the PPP leadership possibly resorting to large scale protests in major cities. Right or wrong, such is the powerful sway and reach of the top party leader in our political culture. Bilawal Bhutto Zardari’s rash, grudge-drenched recent tweets, embellished with four-letter words, too were ill-advised and have raised hackles. The PTI should show maximum flexibility within legal limits for Nawaz Sharif, while the NAB accused, however prestigious their political pedigree, must refrain from populist incitement and prove their cases in court. The sources of friction must be minimized pragmatically.
