Pakistan has of late been a hotbed for discussion on all forms of political matters, ranging from Restoration of judges to the impeachment/ resignation of the president to breakup of the coalition to finally the election of a new Democratic President. Amidst all this hullabaloo and fiery discussions in current affair programs on television and also in Drawing rooms and dinner tables, another significant point of discussion has been the volatile condition in northern areas of Pakistan especially in the tribal areas where Pakistan Army continues to fight a proxy war on terrorism for our US allies.
However what is forgotten is that Pakistan is fighting an even bigger war at the moment. This war is hardly mentioned in our media and the pulse of the nation is hardly aroused by discussions on this front. This is the ‘economic’ war we are fighting which is slowly and gradually nibbling away at the very edifice of our survival in the world community. To just give some examples of the deadly arsenal of this war, they are known as GDP, Inflation, Balance of Payments, Exchange Rate(Dollar) and that deadly nuclear arsenal Foreign Exchange Reserves. Of late, Pakistan has seen a major reduction in GDP(growth is significantly lower as compared to last year), Inflation is at a record 24% in the last quarter and Balance of Payments is in a major decline as imports+ Oil payments offset the minuscule revenues generated by our dwindling exports. Further, our Exchange Rate, especially against the dollar is such that when the dollar was become weaker against most currencies, the Rupee depreciated against the rupee by almost 25% from Rs 62 to Rs 77. Our nuclear arsenal i.e. Foreign exchange Reserves are at an all time low in the last decade and there are talks of default in the international community. International Credit Ratings continue to show lack of trust in Pakistan’s economy.
A look at history indicates that all countries with a strong economy are the ones who are dominant in global politics and world affairs. The biggest war ever won is always on the economic front because the military is also after all dependent upon economic growth for its sustenance.
Pakistan’s economic war has reached a level whereby there is little hope for a turnaround until and unless the powers that be take things seriously for a change and instead of dilly dallying over their political gimmicks, they concentrate on the economy for a change. The Rupee declined by 25% but the State Bank and the Ministry of Finance were at best speechless. Right now, the yahoos who run our country’s economy must work on an emergency footing and take drastic steps for revival of the economy. I am not an economist but i can also tell that increasing taxes is not the solution. On the contrary, they need to reduce taxes in order to boost spending which shall have a multiplier effect on the economy. Secondly, the top priority should be to boost exports. India and Bangladesh are giving hidden subsidies to their textile exporters. Our Textile sector is the backbone of our export base and generates employment(read spending) for millions of people directly employed or indirectly linked(ancillary trade) to this sector. If the government gives even 8 to 10% subsidy to this sector, exports will get a major boost, thereby improving our balance of payments and subsequently the exchange rate and Foreign Ex Reserves and so on.In addition, our Royal friends, the Saudis must be told to act rather than speak and give us deferred payments on our oil facility. After all, a few billion dollars of delayed payments is nothing more than spare change for our Saudi friends. Third, essential commodities need to be subsidized or action needs to be taken against hoarders. If people dont have money to spend other than on food, there will always be a recession on the economic front.
The time for action is Now or Never!!!!… the billion dollar question is whether the people in charge of economic affairs can rise above their petty/trivial shenanigans and act decisively for a change…. only time will tell!!!!