The sinking ship

The worrying thing about the economy is the government’s failure to take ownership

It seems as if everything is going wrong. The deal with the IMF still eludes the government, even though it has taken the prior actions it was told to. The rupee continues to sink, dropping Rs 4.61 to Rs 261.50 per dollar on the interbank market, reversing a recent trend of appreciation. The rupee is trading at Rs 285 to the dollar in the black market, and has reached Rs 295 in Kabul, thus making its crossing 300 more a question of ‘when’ rather than ‘if’. Inflation set an new record, with the Consumer Price Index making its single highest jump, of 31.6 percent, in February, the highest recorded since records started being kept in 1965. As the federal government sees inflation ascites worst enemy, that news would cause it the greatest pain, and would make the Supreme Court’s decision on provincial assembly polls all the more unpalatable.

Perhaps the most disturbing aspect of the situation is that the government does not seem to have any idea about what to do. Rather than putting a firm hand at the helm, it is almost as if the ship of state has been put on autopilot, while the government has gone off no one knows where. The Prime Minister keeps on going through the motions, behaving like a Prime Minister whose country is not in the throes of a full-blown crisis It is true that the Finance Minister has been imposed upon him, but he was imposed because the country was facing an economic crisis, and PML(N) Supremo Nawaz Sharif felt that the party was taking too much flak for comfort. Incumbent Miftah Ismail was ousted, and replaced by Ishaq Dar, who had the relatively narrow mandate of repairing the economy. He did not. Even more recently, when newly anointed Chief Organizer Mariam Nawaz returned to the country, she exhorted everyone to have more faith in Senator Dar. The results are in.

Neither Prime Minister Shehbaz Sharif, nor Senator Dar, have shown any sign of having a solution. The only thing Senator Dar said he could do, bring down the value of the rupee, never brought to the level he had promised, and left the country exposed to the sort of pressures from the IMF that it is facing. Probably worst for the economy is the impression that the government does not know what it is doing. After all, that was precisely the reason it ousted its predecessor.

The Editorial Department of Pakistan Today can be contacted at: [email protected].

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