Pakistan being pushed to imminent default

Having followed the rhetoric of the economic team headed by Prime Minister Shehbaz Sharif and spending hours in listening to trade and industry and economic analysts, I am forced to arrive at the conclusion that all the steps being taken are hastening Pakistan’s default process.  

If anyone is still living under some kind of illusion, he/she must understand that the foreign exchange reserves held by Pakistan have almost exhausted, whatever, numbers are being quoted are ‘borrowed’ not ‘owned’ by Pakistan.

Therefore, the top of the agenda item should be getting the US$ one billion IMF trance released. Once this amount is released only then other friendly countries and multilateral financial institutions will start disbursing the count.

Along with this, the ‘disaster recovery plan’ has to be supported by taking measures for luring remittances, boosting exports and containing import.

I believe the worst deficit being faced by the incumbent government is ‘confidence deficit’. Without mincing words, it may be said that most of the decisions taken since coming into power are not aimed at strengthening the economy but creating ‘financial chaos’.

For boosting exports, Pakistan’s competitive advantage has to be restored. Hike in interest rate, electricity and gas tariffs and POL prices will only erode competitiveness of the local manufacturers. If they can’t compete in the global markets, the objective of boosting exports just can’t be achieved.

It has become a must that economic team must learn to remain silent and avoid giving funny statements i.e. taking lesser tea. They just can’t deny the fact that no reduction has been made in the salary and perks of elected representatives, bureaucracy and judiciary. On the contrary there are proposals to increase their salaries and perks.

There is a lot of talk about ‘circular debt’ but no admission that the root cause of this menace is ‘blatant theft’ going on with the connivance of high officials of the utility companies.

Prime Minister was prompt in imposing 10% super tax on companies, but there was no is mention about taxing income from agriculture.

Always a refuge is taken behind ‘taxing income from agriculture being a provincial subject’. If taxing all income is the responsibility of the federal government why taxing income from agriculture is a provincial subject?

If the provincial governments keeps on failing in collecting tax on income from agriculture, these should be ‘stripped off’ this right.

Last but not the least; indiscriminate load shedding in the name of saving fossil oil/gas is the most illogical approach.

Therefore, there is an urgent need to produce exportable surplus by boost working of industrial units, attaining synergy and optimizing cost of production.