How do news reports of our able finance managers knocking at the IMF’s door again sound, especially in light of their recent boast of moving beyond the Fund, focusing instead on home-grown growth? And strangely, whenever we revert to the begging bowl, our stance assumes a certain audacity that invariably demands rolling back strict austerity conditions that derailed the preceding interaction. But now that we’re talking again, and apparently a follow-up meeting has been set for Dubai, there will a deal of one kind or another, and strict austerity is practically assured.
So what are we to make of the government’s present position? Is the growth drive, promised while parting with the Fund, compromised? Will revenue generation again falter, leaving serious steps like FBR restructuring that were the cornerstone of self-reliance for another fiscal year? Is blocking Rs400b worth of annual leakages from PSEs no longer on the cards?
Sometimes, it is important to scratch the surface. Recent initiatives like interest rate reduction, finally facilitating private sector investment, etc, will bring intrinsic benefits only if the government withdraws its mammoth self from the money market. With hindsight, especially since the government has failed to honour its promise of reduced local borrowing, it’s a safe bet that the central bank is actually facilitating government borrowing with the rate cut.
So long as leakages are not checked, and available avenues of raising revenue not streamlined, need for borrowing to finance non-development expenditure will continue. Hence another blatant about turn on yet another tall promise. With such posturing, it is not surprising that the national debt has doubled in the few years of the present dispensation. But the more the government borrows to stay afloat, the more it puts its fortunes on borrowed time. Falling short of budgetary targets again will seriously wrongfoot its electioneering by the time the present fiscal comes to an end. It must at least be seen trying to restore fiscal balance, instead of unashamedly distorting it.
