Confusion over government’s financial policies hurts the economy. Financial markets don’t perform to their potential in the absence of a clear economic roadmap; and businessmen, traders and investors prefer to stay on the sidelines to wait and watch. Good economic managers know the importance of keeping trade and business quarters abreast with their policies in short, medium and long terms. The economic turmoil witnessed in the country in the wake of the bailout agreement with the IMF had a lot to do with the haze surrounding the terms of the agreement. A lack of clarity over the type of the exchange rate regime agreed upon and the new interest rate level, among other things, drove panic through the stock and money markets.
However, the government has finally rolled out its economic roadmap, with claims of achieving economic stability over 6 to 12 months and then moving into the recovery phase, to be followed by a period of high growth. At a press conference over the weekend, Dr Hafeez Shaikh, the PM’s adviser on finance, revenue and economic affairs, outlined the steps that would be taken by the government in the coming weeks and the resources it would have at its disposal for achieving the mentioned economic targets.
On how the government would tackle the balance-of-payments crisis, the finance adviser highlighted the foreign currency inflows from various sources – $6 billion from the IMF and $2-3 billion from the World Bank and the Asian Development Bank – as well as the deferred-payment facility of $3.2 billion to be provided by Saudi Arabia and of $1.2 billion to be provided by the Islamic Development Bank on purchase of oil. The adviser also talked of the asset declaration scheme to make cash, real estate and other assets — both in the country and abroad — part of the economy.
The adviser also assured that the government’s philosophy and determination to bring Pakistan on track for stability and prosperity would be reflected in the coming budget. Let’s hope that the steps taken by the government “to manage the economy” will bring stability in the near term and pave the way for growth later on – as claimed.
