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18 November, 2019 00:00 00 AM
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Austerity is hurting Pakistan, it’s time for some prosperity

Shahab Jafry

Sometimes you're just unable to control what comes out of your mouth, especially if you hold a top position in government; that too through no effort of your own. That, perhaps, explains what happened the other day to the Pakistani finance minister. Special advisor to the prime minister on finance, actually, since he didn't win an election or do anything to be there. He just descended on the finance ministry one fine day just as Prime Minister Imran Khan was thanking the International Monetary Fund (IMF) for the latest, newest bailout programme.

But first a little perspective. The able advisor, along with his own able set of advisors, was waxing eloquent, as usual, about all the right things the government has done to turn the economy round and all that at a press conference a couple of days ago when some reporters kept pressing him about the high prices, especially food inflation.

So he told them, careful not to miss the main point, that the government was no longer borrowing from the central bank and there had been zero currency printing (surely he meant excess printing) over the last four months, so prices are really not such a big concern anymore. Plus, there's a clear reduction in the current account deficit; what more could anybody possibly want?

But common-man reporters, unable to wrap their heads around something so simple and stra ight forward, kept irritating him with questions about prices. And when one mentioned that tomatoes were selling, in most parts of the country, at about Rs300 per kilo (approximately $2, which is historically very, very high) he had to stop everything and set a couple of points right.

First of all, he couldn't understand where those reporters were getting all those figures from. He's clearly never gone shopping for tomatoes, nor sat down with too many people who have. Hence, most likely, his surprise at grown-up men quoting prices of kitchen items (tomatoes weren't the only thing mentioned, nor the only item recording record inflation).

And secondly, he naturally felt compelled to educate the media whose only job these days, it seems, is badmouthing the government. "The price per kg of tomatoes (at some Karachi market) is Rs17, go and check for yourself," he said. Since then, reportedly, he's been quite unhappy about being the butt of all jokes, especially online.

Everybody in Pakistan knows too well of the wide gulf that separates common folk who worry about tomato prices and the feudal/industrial elite that runs the country. And, in the last year or so, almost everybody has also come to terms with the fact that Imran Khan's team isn't any different. So nobody would've been really surprised that the de facto finance minister had no idea about food prices, or even that he was surprised by such questions. I wasn't.

The problem with this administration is that they really don't understand why really expensive food is such big deal. He didn't exactly say it, but you could see that he wanted to say it. If we're putting everything right that everybody else broke down and if that means high food prices for a few years then so what?

And that's a sentiment Dr Abdul Hafeez Shaikh shares with his boss, the prime minister. Even if wages are shrinking, jobs are disappearing, and prices are going through the roof, there's no reason to worry he keeps telling us; before piling yet more taxes onto people whose income streams are already drying.

But just how long is a nation of more than 200 million, most of them poor, supposed to wait till its aristocrats sort out policy irritants? And if only it were as simple as 'we're only fixing what others broke' and so on. It turns out - and more and more economists are beginning to realise this - that the finance ministry isn't really running on much of a plan.

It's only counting, at the end of the day, on the IMF bailout to make all the worries go away. But if that were so, we wouldn't have needed a 13th bailout from the same lender, would we? And Imran wouldn't have mocked Nawaz for going to the Fund just five years ago, would he? Plus with unreasonably high taxes on just about everything, a very high interest rate, weak currency, and both inflation and unemployment shooting, where are the triggers for growth that the government insists are just around the corner?

It would be good to have a cut-off date for all this austerity budgeting. The take-home's already down, then one has to pay more for food, utilities (also suffering very high inflation), kids' school fee if you're lucky, and pass the rest of the month praying that Imran doesn't feel like more taxes.

With the finance ministry clearly clueless, everybody turned to the other saviour that suddenly came with the IMF programme, the SBP (State Bank of Pakistan) governor. But he disarmed all onlookers very quickly by beginning with, "Please nobody ask me about vegetable prices."

Shahab Jafry is a senior journalist

based in Lahore, Pakistan.

Khaleej Times

 

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Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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