Economic Crisis Over! | Editorial

FINANCE Minister Asad Umar has said that the country’s economic crisis has been successfully been overcome with the help of some friendly countries and now all fundamental economic indicators are improving and moving in the right direction. Addressing the inaugural ceremony of the 11th South Asia Economic Summit in Islamabad on Tuesday, he said the financing gap for the current financial year has been plugged and the fruits of government’s vibrant economic policies will soon be visible.
The Minister has to be believed on this account as he has overall responsibility of economic and financial matters and he might have reasons to be satisfied with the current state of affairs. There is no doubt that timely assistance of Saudi Arabia has made all the difference and now China and United Arab Emirates too are expected to come out with some sort of packages to help Pakistan address its economic woes. The Government is also expecting positive outcome of its deliberations with the International Monetary Fund (IMF) especially when it has started implementing some of the harsh measures proposed by the Fund as pre-condition for a bailout package. However, we would remind the Minister that non-availability of necessary finances is just one aspect of the economic crisis and the Government will have to pursue prudent policies in many other areas as well to bring about a genuine and sustainable change in the financial health of the country. What happened to the rupee and the stock exchange is a clear indication that the economic crisis is not over and much will have to be done to restore and boost confidence of local and foreign investors. Previously, the Government slashed the development programme for the current financial year in a big way and as a consequence economic activities have slowed down and the problem of unemployment has also compounded. Now it has decided to cut down the non-development expenditure of the ministries, divisions and departments by 10% envisaging a ban on purchase of new vehicles and creation of new posts. Government machinery is already at a standstill as Finance Division is releasing nothing except funds for payment of salaries and pensions and that is why there are dues worth billions of rupees against other heads including transport fuel, stationary, medical expenses and commutation. These dues need to be cleared to avoid piling up of another kind of circular debt. The real improvement in economic conditions would come if, among other things, we succeed in attracting investment, focus on increasing industrial and agricultural output, expand tax base and encourage overseas Pakistanis to send their money through banking channels.

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