Subsidies on exports

Dar appears to have adopted a mystery novelist persona, repeatedly saying he will explain himself when time is right

Finance Minister Ishaq Dar is continuing his efforts to paint himself as the saviour of the economy, introducing new subsidies for the export industries. Unfortunately, the subsidies will do little, if anything, to help the common man, as they do not bring any guarantees of increasing production efficiency or incomes for labour, but only reduce input costs for electricity.

At a certain point, those subsidies could lead to our export targets to impose new tariffs to counter the government support, meaning that public funds will have been wasted on subsidising uncompetitive industries and their billionaire owners when working-class people are still struggling. Dar, at a presser on Thursday, also made it clear that his populist decision-making lines up much more closely with PTI finance ministers, rather than his own PML-N comrade Miftah Ismail, who is looking more and more like the only person who can take credit for the resumption of the IMF loan programme and saving Pakistan from default.

This is because Dar, like his PTI predecessors, went ahead with populist short-term relief measures that are in direct conflict with obligations to the IMF and other financiers, while at the same time doing little to address the structural problems that led us into the situation that necessitated the unpopular measures that Miftah was forced to take. While we do need to create an environment conducive to enhancing industrial output, it cannot be artificial, and it must be transparent.

The disjointed protectionism and crony capitalism of the past years created the illusion of prosperity on the back of unbalanced growth. Dar’s critics have long claimed that the growth figures during his terms were artificially inflated, while he is doing himself no favours by refusing to explain how the recent relief packages will be funded. Counterintuitively, Dar appears to have adopted a mystery novelist persona, repeatedly saying he will explain himself when the time is right, perhaps forgetting that his primary duty to inform is not to the Sharifs, but to the public, whose money he is spending sans paper trail.