The darkness deepens

They say the night is darkest before the dawn. On Monday, it couldn’t have gotten darker—somewhere, someone in place of authority, ensured it, maybe through incompetence or worse.

Don’t be fooled, Pakistan has seen worse times. It was once shrouded in terrorism—but terror attacks are making their way back again. Political upheaval has been greater, but if the past is any indication, 2023 promises to be just as chaotic — if not worse.

The less said about the economy, the better. But we will still say it — largely because enough words have still not been said and of late, even screams have fallen on deaf ears.

On the economic front, some indicators are at their worst state in multiple decades.

The interest rate, largely a central bank tool to deal with inflation, is at its highest level since 1997. Inflation itself is at the highest in over two decades. The PKR just saw its worst year since the global financial crisis. Valuations at the stock exchange — yes, they are a fair indicator of where money is flowing and hence, by extension, a reflection of the economy—are at multi-decades low.

In less than a year, three finance ministers have graced the seat that runs Pakistan’s fiscal matters and a similar number of central bank governors has warmed the cushion of setting monetary affairs — the two most coveted, important positions for any country, let alone Pakistan.

Such is the sorry state of affairs, and the speed at which things are moving, that all three finance ministers have gone round and round (no pun intended) to resolve the issue of circular debt by arriving at the very same so-called solution of dividend payouts. A final decision has not been taken, but a plethora of meetings have.

An energy conservation plan was chalked up, but Pakistan’s public never caves without a fight. It resisted, and the government retreated—such is the state’s toothless power. But make no mistake, it gets the job done, when it wants to. How else would you explain the countless developments that have steamrollered on the political front—from the no-confidence motion to dissolving several assemblies, amendments in NAB laws, etc., etc.

No one in Pakistan will argue on the measures that need to be taken for an economy that has died so many times that even the International Monetary Fund (IMF) is now wondering if another resuscitation is worth it. The IMF is called the ‘lender of last resort’, and yet, we have approached it nearly two dozen times.

And this is slightly less usual, but shouldn’t take anyone by surprise—businesses are now frustrated, if they weren’t before.

For long, high costs of production have effortlessly been passed onto consumers with deep pockets – the few that do. Pakistan’s businesses are not really known for their inclusivity.

But now, with import restrictions in place, they have very few products to offer and naturally, cannot pass on anything to their consumer. So they bawl, cry foul, and throw tantrums.

Amid this disarray, Finance Minister Ishaq Dar has never missed his fortnightly appearance to announce oil prices. He neglects to mention that the government is availing its maximum ceiling for petroleum development levy, or that this so-called oil price stability has come at the expense of lower remittances and export proceeds, widening gap with two simultaneous currency markets, import restrictions, slower growth and decreased taxes. He has higher fuel prices and irreversible inflation on his mind. But who’s keeping score?

The opposition is busy in calling for general elections—their screams have been unheeded for almost eight months. Yet, it has chosen to sit out of the National Assembly as government bills have sailed through. It’s better to reach the public directly, they believe. For the purpose of another no-confidence vote, however, it is willing to step right back in.

But when all is said and done—remember this.

Pakistan endured what can very easily be seen as one of its darkest times in history without leadership in place and anyone even willing to lead the way. It was shepherded into chaos, by all, and when the time came to take action, no one stepped up.

When a man is dying, you don’t sit around and pass blame for his illness. You act, and act to rescue.

The world has already announced its verdict on Pakistan—no more aid, but project loans and investments with outright KPIs and deliverables. Help is not coming. We don’t even deserve it anymore, to be honest. It has spoilt us rotten.

Copyright Business Recorder, 2023