Federal Finance Minister Ishaq Dar unveiled the Economic Survey2013-2014 on Tuesday, the day before he presented the 2013-2014 Budget, presenting a gloomy picture of the economy, as its backdrop. The Survey officially confirmed what had been claimed by all of the opponents of the recently departed PPP government, that it had presided over the missing of the targets for 2012-13.
The Survey has confirmed what the electorate already believed on May 11, that the economy is in poor shape, and the result showed that it thought the PPP not just responsible, but also incapable of sorting matters out, certainly less capable than the PML-N.
One consequence has been the push for fresh IMF package. From what Senator Dar said, it seems the government intends to go for just such a package, portraying it as taking fresh loans to return previous loans. It should be noted that the current foreign exchange crisis is caused by IMF repayments on its last package, in the absence of any growth generated locally by the previous government. IMF loans are only supportive of stability, and do not directly contribute to growth.
Stability, in concurrence with economic revival is what is required. The IMF too, at the moment, is not eager to look at Pakistan’s case file. It will take some asking for them to even consider Pakistan’s case, and that too after Pakistan shows that it has already put reforms in place, which previously were meant to follow an IMF loan.
Now, Pakistan’s by no means unsolvable economic problems, are truly in its own hands. Stability bought by an IMF loan will have to be used to full effect to get the rusty wheels of the economy turning again. Tough decisions will have to be taken, which may in the immediate short term provide more grief than relief, but for Pakistan’s economy to be corrected, well-known, finally accepted remedies will have to be put into place. Local considerations must be applied to enhance these remedies, not to excuse them from applying totally.
Apart from this, there were the much more pressing measures to take, on the string of failures to meet targets compounded by the ballooning of debt. According to the Survey, public debt has reached Rs 14 trillion by June 2013, up from Rs 3 trillion in 1999.
This can only mean a heartless printing of currency, with consequent monetary expansion eroding the value of currency, and keeping inflation high, at levels which are choking off economic growth. It shows that official extravagance was the hallmark of the Musharraf era as well as the outgoing PPP government. Senator Dar will have to ensure that the government does not fall prey to this particular temptation.
In particular, it must ensure that officials, both elected and permanent, do not misuse the taxpayer’s money to lead luxurious lifestyles. The Economic Survey shows that whatever was said about the state of the economy was true, and there must be a renewed commitment to follow a path of repairing the economy.