Common man’s woes

Pretty significant is the fall in the current account deficit – from $20 billion at the end FY18 to $13.6 billion at the end of FY19 and to an even lower level in the first four months of FY20 i.e. the ongoing fiscal year. This fall in the current account deficit has led to Prime Minister Imran Khan thanking his economic team for finally “bringing economic stability” in the country and providing room for the government to focus on the microeconomics. Should the prime minister really breathe easy now that his government “has weathered past the difficult times”? Can the people now really expect the prime minister to concentrate on creating jobs, curtailing the price hike and cheapening the utilities like electricity, gas and petroleum products?

Well, it’s no revelation that the fall in the current account deficit has mainly to do with import compression as the exports and foreign investment have only witnessed a marginal rise, and the share of remittances in foreign inflows has been almost flat over the first four months of the ongoing fiscal year. So what has resulted in satisfaction for the prime minister has been achieved merely by slowing down the economy i.e. at the cost of the economic growth rate – which is estimated by the IMF to fall to 2.4 per cent by the end of the ongoing fiscal year from 5.8 per cent at the end of FY18, just about the time the PTI had taken over.

There is no doubt that the PTI-led government has been taking steps to enhance exports and attract foreign investment – something that is reflected well in Pakistan improving its ranking from 136 to 108 on the World Bank’s Ease of Doing Business index for the year 2019. It goes without saying though that an export-led and investment-laden economy is not something that could happen in the short or medium term. How then, amid the persisting slowdown, the prime minister is going to focus on mitigating the common man’s sufferings is a million-dollar question – something that must be a cause for concern, rather than the satisfaction, for his whole economic team.

Published in The Express Tribune, November 17^th, 2019.

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