National economy and Dar’s Dogma

Finance Minister Ishaq Dar has announced a power subsidy package for Pakistan’s export industries with a per unit electricity cost set at Rs19.99. Dar made this announcement after the talks with a delegation of the Pakistan Textile Exporters Association (PTEA) on Thursday. The Chief Economist termed the demand for energy subsidies just and promised that the government would bear the difference between the new fixed price and the actual per unit production cost.

According to him, the annual burden of the subsidy would amount to around Rs. 90-100 billion, the all-inclusive package was announced for the five major exporting to boost the country’s exports. Dar further said that he has created space to manage things and expressed confidence to justify his measures during the upcoming negotiations with IMF regarding the implementation of the IMF program that categorically prohibits such sugary measures which reduce the government income and creates a balance of payment crisis. During the media interaction, Finance Minister claimed that the real value of the dollar vis-a-vis Pakistan’s rupee was below 200 and the market is regulating itself without using any administrative or fiscal measures by the government.

Pakistan’s economy has been facing uncertainly and acute fears of collapse due to politically motivated economic decisions of past rulers. The incumbent government hardly escaped the economic default with timely assistance from friendly countries along with tough domestic economic decisions in recent months. However, Pakistan is still facing grave economic challenges including depleting foreign reserves, weak currency, and rising inflations coupled with political instability despite the revival of IMF’s Extended Facility Fund (EFF) program about a month ago.

Previously, the government failed to control the artificial depreciation of Pakistani currency while now the dollar is diving deep after the return of Dar, which is indicative of the fact that some people had been creating problems for the government intentionally and this phenomenon clearly illustrates the vulnerability of our economic and monitoring system which must be sorted out at earliest.

In fact, Pakistan’s economy became prey to politics, populism of politicians, conspiracies of mafias, and pressure tactics of influential groups while corrupt bureaucracy and selfish leaders always spoiled the businesses, trade, and banking systems through flashy measures that hurt the nation in the long run. Previously, former Finance Minister Shoukat Tarin made tall claims like Dar regarding dealing with the IMF but failed and the nation is still paying the price of his myopic policies. Now, Dar came to test his expertise and prudence in the field of economy, while multiple syndicates, business cartels, social activists, and public leaders are rushing to him to give him a bit of advice and take favor from him. Although, the rupee strengthened its position over the past weeks but these things seem to be the level-playing tactics to assess and neutralize Dar’s competence. Presently, Pakistan is battling a whirlwind of economic. social, political, and security issues and the national economy is deteriorating sharply. The present situation merits a calculated and thoughtful move to steer the country out of the chaos while drawing room assessments and fantasy assumptions can plunge the country into another disaster.