And the economic mess he leaves us in
The words ‘moral basis’ mean very little to Pakistani politicians. Nawaz Sharif famously called upon ex-Prime Minister Yousaf Raza Gillani on the basis of morality to step down, prove his innocence and come back to his post. Of course Gillani never did step down and was made to leave by the Supreme Court. Sharif faced similar music in the Panama Case but refused to step down and was also disqualified.
Finance Minister Ishaq Dar has been indicted by the National Accountability Bureau (NAB). The Finance Ministry is the second most important and coveted portfolio after the Prime Minister and as such it is safe to say that Dar too will have to be made to give it up rather than have a spontaneous correction of his moral compass and do it himself.
That is something the country will be able to live with as it has in other instances but the state of the economy in which Dar leaves us is much more distressing. Since he took office in 2013 he had a single point agenda: keep building up foreign reserves by reckless borrowing while keeping the exchange rate at an unrealistically appreciated level to reduce the import bill.
This toxic combination has now come back to bite us as debt repayments have reduced foreign exchange reserves by $4.6 billion in one year leaving a dangerously low import cover of three months.
The Asian Development Bank (ADB) predicts that the current account deficit will widen to $14.5 billion in the current fiscal year making it impossible to achieve the ambitious growth target of 6% which realistically will come around 5.5% at best. Recently commercial banks have refused long term lending to the government which has ballooned the short term debt portion of our domestic debt to 44.2% or a mammoth Rs6.6 trillion.
A very poor position on the revenue side with falling exports and low tax collection means little to no help will come from there. We desperately need a finance minister who thinks long term providing viable solutions accompanied with tough economic reforms to get us out of this current mess.
