THE PML-N has accepted a daunting challenge by taking up federal ministries of finance, commerce, food and agriculture, and petroleum, which require men with nerves of steel under the current economic situation in the country. The economy, which was manageable a year ago, is in a shambles. Steering the economy out of the present mess is a Herculean task. On the macro-economic front, foreign exchange reserves are depleting. The rupee is under pressure. Local industries are fighting to stay afloat. Bank interest rates are high. Exports are declining and imports have gone out of control.
At the micro level, inflation, particularly of food, is very high; agriculture production is stagnant and the uninterrupted availability of wheat is under question. Water is short and hurting inter-provincial harmony. Power shortage will persist for a while. The gas supply will remain short, particularly during winter. Housing shortage is acute. The gap between the poor and the rich is widening.
It was under the circumstances that the PML-N, under a package deal, had to accept most economic related ministries. On the surface, the task looks impossible, particularly in the present situation when the general public is impatient. The masses have been exploited by the past rulers who had asked them to bear the pains of their so-called reforms on promises of good days ahead.
Economists, however, point out that there is a way out of the present situation. They say the government will have to regain its grip on public institutions and then ensure that they are operated transparently and fairly.
The PML-N leadership has accepted a huge challenge. The Punjab government, they added, will have to procure enough wheat this year to ensure the food security of not only the province but the whole country.
They said the federal ministry of food and agriculture and the Punjab had provided food security to the country in the past through joint efforts. An increase of the wheat support price to Rs 630 per maund has provided the impetus needed to officially procure a large quantity of wheat. The Punjab government will have to ensure that wheat does not land in the hands of hoarders this year.
Experts warned that though the new government would assume power when wheat was at the harvesting stage and it had not any responsibility for the crop size, however, the Punjab government and the PML-N would have to share the blame if any wheat crisis occurred this year.
They said Ishaq Dar had the experience of running both finance and commerce ministries in the past.
They said he had handled the ministries prudently in more testing times when the developed world slapped sanctions on Pakistan in the wake of nuclear tests in 1998.
They hoped he would take austerity measures to cut non-development expenditures. The prime minister, they added, has also announced austerity measures which might not greatly impact the deficit but their symbolic effect would be immense.
They said the tax to GDP ratio, which was 13.5 per cent when Ishaq Dar had left the government on October 12, 1999, was reduced to 9.9 per cent of GDP. They said Dar would like the tax to GDP rate to revert to its 1999 level and beyond. This measure alone will add Rs 350 billion to the revenue. The new finance minister is well aware of the nitty-gritty of imports and will take measures to eliminate under-invoicing which is damaging the local industry.
The economists said if the PML-N delivered on the economic front, benefits of the success would be equally shared by its coalition partner - the PPP. However, if it failed to improve the economy and the lot of the common man, only the PML-N will be held responsible for it. The survival of the PML-N, they added, lies in ensuring that it delivers on the economic front.
Courtesy: The News, 30/3/2008
