- And the IMF
A new line of defence against harsh criticism over its performance has been formulated by the government recently: blame it on the ‘mafias’. Since it has spent fifteen months at the helm of things, the argument that ‘more time is required’ simply is not cutting it anymore. It was Prime Minister Imran Khan who first started throwing around, quite liberally, the theory that price hikes were being orchestrated by “mafias and hoarders”. Minister for Planning Development and Reforms Asad Umar repeated the same recently as well. There have always been organized groups of people who try to manipulate the forces of demand and supply, especially in the case of essential food items, in order to make a quick buck. These so-called ‘mafias’ are therefore neither the only nor the primary reason for the rise in prices; there are other external factors at play that have caused some serious damage to the economy and continues to do so and the reason not much is said about those variables is that the government has little to no control over them.
Take the Rupee-Dollar parity for example; it is under the SBP’s discretion where the dollar rate goes and the top two posts at the central bank are filled by ex-IMF employees. Much of the rise in prices is attributable to rupee appreciation. Then there are non-negotiable IMF conditionalities, the most damaging of which is the continuous rise in power tariffs. A tax revenue target of Rs 5.23 trillion (revised down from Rs 5.5 trillion) is also to blame as the government has increased existing taxes and introduced new ones as well, dealing a severe blow to disposable incomes of households and bottom lines of businesses. Yet, revenue targets are being consistently missed as there was a shortfall of about Rs385bn in the first seven months of the current fiscal against a target of Rs2.79 trillion. An IMF mission that is currently in Pakistan to review progress and approve the release of a second tranche of the $6 billion facility would not be very happy with the latest revenue figures. Perhaps it’s time the PTI stop playing the blame game, accept its mistakes and get to work to provide much needed relief to the masses. There only so much that the people can endure before they take matters into their own hands; an outcome of the government’s poor performance that no one wants to witness.