- PM Khan’s 2020 outlook is overly optimistic
With the new year just around the corner, there is little to look forward to in terms of the economy considering its precarious condition, which the PTI government had vowed to turn around within a year, once in power. Tall promises of economic prosperity that had “never been seen before” were made during the 2018 election campaign with an emphasis on job creation, poverty alleviation and growth, all of which would supposedly be achieved without taking loans, particularly from the IMF. After forming a government with a razor-thin majority, the PTI’s economic team came across as an underprepared collection of new and old faces that had not fully comprehended the enormity of the task at hand. Former Federal Finance Minister Asad Umar was shown the door in less than a year, and perhaps it wasn’t all his fault, for he had been put up on a pedestal by none other than Prime Minister Imran Khan himself, portraying him as some sort of economy and finance guru who would immunise Pakistan to the worryingly harsh macroeconomic realities it was facing. An IMF package was secured, but as a first in the country’s history the Fund also sent its own programme implementation team; Dr Hafeez Sheikh as PM’s advisor on finance and Reza Baqir as Governor SBP. They have proven quite effective as energy tariffs continue to rise on a regular basis, an unachievable tax revenue target stares the government in its face, record high inflation persists as does a 13.25% discount rate that shows no signs of being cut.
In light of these stark realities Mr Khan has promised that 2020 will be the year of change and growth, expressed with more or less the same empty bravado shown more than a year ago. There are no lucrative foreign direct investments in the pipeline to speak of, exports have stagnated and refuse to budge amid factory closures due to the high cost of doing business and the so-called tax reforms have not been implemented in a fashion that will see the government’s coffers overflow anytime soon. There is no basis for the PM’s statement that this coming year will be a comfortable transition from ‘stability to growth’. Rather than inaccurately passing off its performance as some unique diamond pulled out from a lump of coal the PTI government should first gain some goodwill among the masses that has seen their standard of living severely reduced in the past year and a half.
