Imran Khan and his team before 2018 general elections vowed to fix the ailing economy within roughly three months – read 100 days – but financial investors and creditors alike are growing restless. The question they continue to ask is when would they start the process? More importantly, what exactly do they plan to achieve. That is what everyone – foreign, local investors and creditors – seem to have on their mind nowadays.
The new Minister for Finance Mr Asad Umar, has asked till September end to come up with a strategy which will best suit the given state of affairs, which according to him is not only desperate but entirely different from what the previous government’s numbers suggest. According to him, the numbers are grossly misrepresented, the deals made have not exactly been efficient, to say the least, in addition to the lack of transparency related to China-Pakistan Economic Corridor (CPEC) projects. Keeping that in view, it is imperative on Mr Umar to not only show the true picture of the economy but also share the strategy to achieve goals and targets – which also need to be revealed. Anything short of that will not sell with those looking closely at the first steps of the new government.
Consequently, with that comes the sense of uncertainty, which was at visible after the first Economic Coordination Committee (ECC) meeting recently held under the chairmanship of finance minister. The media rumors mentioned of a hovering axe over fertilizer manufacturers fed the 100 index to bears which during the recent bout of losses erased 600 points. Investors and creditors are also restless as to how much and how many of the decisions taken by the previous government will be reversed by Mr Umar.
Then there is the decision on State Bank’s (SBP) governor, which is also a momentous task. The present government must give the reins to somebody who is not only competent but also unwilling to make key policy decisions to short-term political objectives. The decision would go on to prove the integrity of the economic intention of the new government.
Following that, the Financial Action Task Force meeting, which is due in October later this year, would also require a unanimous and coherent decision making from the economic, political and military leadership of the country. The previous government’s inability to take key actors on board has caused a great deal of damage to the country’s economic and political image. Strict laws against money laundering and terror-financing must be presented, approved and enforced with the utmost political will. PTI leadership must also tread these waters carefully since these decisions will test the historically fragile relationship between the political government and the military.
Lastly, PTI must take stock of their political capital which with more delays will only erode and utilize it to the best of their advantage. Giving the prevalent political fervor because of the pre-election campaigning, the present government can take initiatives to make key policy decisions without much resistance. It is also very important that the government starts speaking the language of structural change, and get on with it since any more delays will weaken dilute the bargaining power which it currently holds!
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