Missing Direction – Diary – DAWN.COM
IT is unfortunate that Finance Minister Miftah Ismail seems to have largely retreated from the public eye at a time when someone with courage and determination is needed to proactively manage the economy.
It is hoped that he has not been pushed into the shadows by detractors within the PML-N. Some had strongly protested against the difficult but necessary decisions that Mr. Ismail had to take to plug the tax leaks that Pakistan cannot afford at this stage. It is clear that he has not yet been forgiven for these decisions.
Last Tuesday, PML-N Vice President Maryam Nawaz, responding to questions on the state of the economy, said she remained “categorically” opposed to the fuel and electricity price hikes that Ms. Ismail was forced to implement. “I do not support this decision, and it should be corrected,” she said, adding that her “first responsibility was to the people.”
Lily: Miftah on the defensive after PML-N supremo ‘strongly opposes’ rising gas prices
For Pakistani politicians of all ideological stripes, “accountability to the people” is often just a euphemism for spending scarce state resources on grants that win votes. Mr. Ismail, on the other hand, has inherited an economy that leaves him no leeway to approve such plans. His compulsions should not be a reason to put him away. Instead, what he may be able to offer, as he has proven in his approach to reviving the IMF program, is uncompromising management of the economy.
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Pakistan has been hit hard by nationwide floods and the devastation they have caused. The impact on the economy will be felt for months. Meanwhile, the current account position continues to deteriorate due to the need to import fuel and cover food shortages, while exporters struggle to meet orders due to a global slowdown, sharply higher production costs and shortages of inputs. The resumption of the relentless rise of the dollar, which is expected to continue in the near future, also makes matters worse. A finance minister freed from the trappings of election-year considerations – especially someone who can put practicality above self-interest – may be just what the country needs to emerge from troubled waters. in which it is located.
The walk will not be easy. Weekly inflation has persisted above 40% for the past few weeks, gouging a huge hole in people’s household budgets. However, with tighter market management and robust price control mechanisms to set fair prices, some of the inflationary pressure can be lifted. To ensure the success of these efforts, it will be important for the Minister of Finance to strongly resist internal demands for “relief” for special interest groups.
A serious mistake was made in removing taxes from merchants’ electricity bills under political pressure. Such errors will need to be reversed. The economy cannot be resurrected if rival factions within the PML-N continue to block and stick to important decisions.
Posted in Dawn, September 18, 2022