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Averting doomsday scenario

Averting doomsday scenario

It is good omen that Finance Minister Ishaq Dar has clarified the government’s position on the country’s debt profile and dispelled the impression that Pakistan is heading toward any doomsday scenario. However, he has presented a fictional comparison on the issue of taking foreign loans between his and the previous government tenures. In his opinion, the previous government took around Rs7.833 trillion loan during its five-year term from 2008 to 2013, showing an average annual compounded growth rate of 19 percent, but the average loans rate during the present government’s three years tenure stands at 9.75 percent. He further argues that the net debt-to-GDP ratio on June 2008 was 53.1 percent which increased to 60.2 percentin five years until June 2013 when the current government took over the office. And that net debt-to-GDP ratio remained unchanged during the three years government of the Pakistan Muslim League-Nawaz from June 2013 to June 2016. As a matter of fact, it is the routine in Pakistan for the ministers to defend the wrong policies of governmentsbut censure the policies of the past governments.

Mr Dar’s narratives make no difference of him with his peers in the past on the issue of performance of the government. However, the only differentiation is that he defended the continuous addition in the stockpile of foreign debts, saying as a developing country it is inevitable.The current government is facing the challenges of good governance and has failed to prove its mettle in financial discipline. The financial management is the area of concern as finding solution to financial woes in foreign loans is not an answer. The only way to improve the financial health of the country is to generate income from local resources which are business and industry. But both of these sectors are not only facing mismanagement but also a kind of chaos. It is hard to start a business and sustain it in a hostile environment due to unwanted interference of the officialsfor apparently personal gains. The business community accounts are checked at various stages from the utility bills to their standard of living, but the officials are immune to any check and balance at any stage.

If Mr Dar is comparing the current government’s performance with the past government, there is no hope of any improvement in the economy during the rest of his tenure in the office. The nation wants development and not comparison of negativities between the past and the present government. Unless the government is able to produce industrial surplus, improve exports and reduce taxes, there is little hope the country will ever rid itself of economic woes.