LAHORE: Efficient and prudent management of the economy is one of the primary functions of any government. For this purpose, in the form of fiscal and monetary policies, both important tools of macroeconomic management are effectively and frequently employed by governments. In fact, the recently-concluded government of the PPP has miserably failed in the management of both areas of the economy during the last five years. On the fiscal side, it couldn’t formulate and implement any significant and systematic policy to accelerate economic activity in the country by mobilising the available resources. On the other hand, during the same period, the State Bank of Pakistan (SBP) also failed in introducing any effective monetary policy to reduce the inflationary pressure on the economy. Despite replacing five finance ministers and four governors of the SBP one after the other in five years, economic mismanagement has been at its highest. Resultantly, the economy of the country is now in a state of stagflation — a dangerous economic condition characterised by a high inflation rate and stagnant economic growth. An unprecedented increase in the volume of domestic and foreign debts was recorded, causing an unbearable burden on the exchequer in the form of heavy debt servicing. Our foreign currency reserves have badly shrunk, making a bailout package from the IMF inevitable. During the same time, the value of the rupee has been in free fall in the international currency market.
The chronic energy crisis has further deepened, badly damaging the already depressed economy, particularly the manufacturing sector. The mismanagement, inefficiencies and corruption prevailing in public-sector enterprises have made them white elephants eating up a large portion of public revenues to the disadvantage of poor taxpayers.
Also, instead of making any serious effort to end power outages in the country and resolving the circular debt issues faced by independent power producers, the government engaged in the controversial rental power projects without producing a single megawatt of electricity. Due to all this economic mismanagement, a considerable segment of the population is now living at or below the poverty line. During this period, inflation, unemployment and hunger have added to the miseries and sufferings of the already dejected, deprived and disillusioned people. Ironically, the party known for its agenda of promising food, clothing and shelter to the people has been instrumental, consciously or otherwise, in depriving them of all these necessities.
Mohsin Raza Malik
Published in The Express Tribune, May 4th, 2013.
