The Finance Division has defended the government’s economic policies with a series of half-truths and whataboutisms, while ignoring some facts entirely and overplaying the significance of some of the government’s actual achievements. For starters, the recent statement referred to inflation in the West as being at record levels but ignored the fact that these record highs are actually lower than what would pass for acceptable, or even low inflation rates in Pakistan.
The 12-month US inflation rate, for example, was at 7.9% in February, with the only area outpacing the headline number being energy — 25.6%. Contrast that with Pakistan, where the inflation rate was over 12% for the same period, and food prices are also outpacing the headline consumer price index figure. The UK and EU had inflation rates of 6.2% and 5.9%, respectively, in February. Meanwhile, all three countries have significantly higher average incomes, lower poverty and availability of government support. They can manage ‘high’ inflation for a short-term, although it will obviously hurt middle and lower-income families. Double-digit inflation, however, would even be crippling for them. Imagine the impact on Pakistanis, who have less disposable income, are more impoverished, and have less available in the form of government support.
We should also note that after the Covid contractions in 2020, those countries saw record economic growth coincide with inflation. Meanwhile, Pakistan has underperformed even on the government’s own measures. While the country did do admirably well in 2020 as the world economy tumbled, ignoring the earlier subpar years of this government by praising post-2020 performance based on World Bank data is also an effort to fudge the numbers. Meanwhile, several analysts have noted that the “unprecedented relief to the masses” through lower energy prices could actually cripple the economy since they may violate IMF loan conditions. As for touting record exports, why not also take credit for record imports and the trade deficit as well?
There was also a surprising effort to blame the opposition for economic instability, reiterated in a claim that people had recognised the steps taken by the government to provide relief to the masses. If this were true, the opposition would not have dared go ahead with its no-confidence movement.
Published in The Express Tribune, March 27th, 2022.
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