Friday, 18 August 2023

Pakistan: Interim setup likely to remain in place a little longer

Over the months I have been saying that current account deficit and budget deficit are the outcome of “Confidence Deficit”. However, the team headed by Shehbaz Sharif, spent most of the time talking about non-issues.

Please allow me to say that Pakistanis were ready to bear the brunt, but unwillingness of the ruling junta to cut contain its extravaganzas, created rebellious attitude. Now, top of the agenda items should be bridging the confidence deficit, curtailing extravaganzas, facilitating the local manufacturers and exporters.

The economic managers must stop saying “these are the conditions of IMF” and come up with a home grown plan. Restoring the competitiveness of the local manufactures can not only help in boosting exports but containing inflation and generating new employment and taxes.

It is encouraging that the Caretaker Prime Minister, Anwaarul Haq Kakar, has assembled a small cabinet comprising of 24-members, which sworn in on Thursday. This can also be termed the implementation of a technocratic framework. One has all the reasons to believe that the setup has been put in place to serve the country beyond 90 days due to the potential delay in holding scheduled elections.

This extended period presents a unique opportunity to the caretaker government to spearhead essential economic reforms. Unburdened by political considerations, they can make tough but necessary decisions to jumpstart the economy. Notably, the caretaker setup comprises of accomplished professionals, particularly in key ministries such as Finance, Foreign Affairs, and Power. This strategic placement underscores their significance in the forthcoming period.

The Prime Minister's unwavering commitment to address pressing economic concerns is evident in his swift actions. His decision to transfer DISCOs (Distribution Companies) to provincial authorities, his efforts to attract investments through the SIFC, and the prompt convening of the inaugural cabinet meeting on Friday, all reflect the priority he places on resolving these issues.

 

 

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