By Naveed Miraj
Finance Minister Ishaq Dar had landed in the country with pomp and claimed that the ‘economic wizard’ had the cure for all our economic woes.
Unfortunately, his indecisiveness has further pushed the country into a much deeper crisis-the brunt of which today is being borne by the consumers in the form of price hike.
Often the lexeme of bombshell is used whenever prices of petroleum products are raised, but the way the finance minister suddenly announced the massive increase of Rs 35 in petrol and diesel prices on Sunday morning surprised all and sundry. The announcement made by Finance Minister during midday.
Though the rumors were rife because of which one saw long queues outside petrol pumps, but nobody was expecting that the raise would be made before 1st February, for which another bombshell is ready to be dropped on the masses.
There is no denying that this increase was inevitable in view of the rupee that lost close to twelve percent of its value after the removal of price cap last week and is also being seen an attempt to appease the IMF, which is visiting soon to discuss the stalled ninth review. IMF talks starting with Finance Minister and his team from Jan 31 till Feb 09, 2023.
Difficult decisions are important to get the stalled IMF program revived in order to avert the looming default.
However, the situation would have not been this worse had the so-called economic wizard not capped the price of dollar and also refrained from making irresponsible statements. Artificially maintaining the dollar at low rate than the market value played havoc with our foreign exchange reserves.
Former Finance Minister Miftah Ismail himself is on record stating that Pakistan lost three billion dollars in remittances and exports due to the unofficial capping of the greenback.
Dar’s policy of controlling dollar this time proved counterproductive rather gave birth to the black market, which consumed our precious foreign exchange reserves and probably landed in Afghanistan.
Had a rationale approach followed, our reserves position would have been much better and the rupee would not have depreciated this low.
Because of record low reserves, our export oriented industry, which is heavily dependent on imported raw material is shutting down. Only in the textile industry, about seven million people have been laid off while various auto companies are closing down their operations.
The massive increase in the prices of petroleum products will trigger another wave of inflation in the country. People were already finding it difficult to make both ends meet and now the current situation is all set to diminish the middle class.
There is already great resentment in the public over soaring prices. Though there are certain international factors but the government’s indecisiveness, flawed policies and political instability has also contributed in it, and that too massively.
The situation is really alarming. Instead of resorting to usual practice of shifting the blames on others, the government must demonstrate the will and determination to steer the country in the right direction.
Whilst, the prices of electricity and that of gas are also expected to be jacked up to secure the next tranche of the IMF, it is important that the government simultaneously come up with a plan to protect the lower strata of society through the network of Utility Stores Corporation. Finance Minister should be quick to take remedial actions.
As soon as the deal is sealed with the international lender, all efforts should be put in to ensure the revival of production activities in the industrial sector.
This will provide jobs to the people and enable them to cope with the price hike to some extent. Inflation coupled with unemployment will be a total disaster and take the country only towards anarchy.
At this point in time, the government’s focus should be only economy instead of political victimization. Rather efforts be made to bring down the political temperature.
