Not as rosy

  • The economy still has a long way to go

Federal Economic Affairs Minister Hammad Azhar cannot really be faulted for taking an optimistic view of economic developments, for that is why he has the job he does. However, when the reality fails to confirm his claims, he runs the risk of being embarrassed from out of his own mouth. He claimed at a press conference that the economy had turned around. That was quite a strong claim to make, and seemed to reflect the Prime Minister telling the federal cabinet that the economic turnaround was hurting the ‘corrupt mafia’. Mr Azhar backed up his claim by saying that investment inflows, foreign exchange reserves, revenue collection, current account balance, trade balance, ease of doing business, Public Sector Development Programme spending, stock exchange performance and inflation were all showing an improvement.

Mr Azhar needs to careful. For example, someone should tell him that foreign investment inflows which are actually ‘hot money’ which only come in because of an attractive interest rate, will leave at once if some other country offers even marginally better interest. Also, the claim of improvement in revenue collection is not only in contrast with the official figures, but ignores the struggles of FBR Chairman Shabbar Zaidi with the FBR bureaucracy. The improvement in trade figures, which underlies the forex figure as well as the current account, cannot be regarded as permanent, and cannot really be credited to any particular step of the government. The PDSP is also in flux, with the government trying to control the deficit by cutting it. Another factor glaringly absent from Mr Azhar’s remarks was employment. Instead of job creation, the PTI’s stewardship of the economy has seen thousands being thrown out of work as jobs are lost all round, with factories shutting and businesses collapsing.

The government Mr Azhar represents, seems to ignore the fact that the real economy is in bad shape, and no amount of clever talk or massaging of the figures will disguise the fact of breadwinners losing their jobs, or of the price spiral that Mr Azhar casually dismissed as due to ‘currency management’ (or rather, massive devaluation). People’s wallets are empty, and they have no means of filling them. Mr Azhar has a job to do, and his talk so far won’t help him get it done.