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October 12, 2018

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The unkindest turn of all

The Pakistani rupee took a record plunge and fell by Rs10 in one day. The information minister, subsequently, informed the nation that the devaluation was caused by illegal capital flight from Pakistan. If this is true, the PTI, now that it is in power, should have at least drafted a policy to bring the looted money back to Pakistan. In my opinion, the recent rupee crash reflects Pakistan weak economic fundamentals.

It also seems that the new government needs to learn that markets are impervious to perceptions and emotional promises and appeals. They work on economic realities. Pakistan’s economy needs structural adjustments. The PTI government ought to invest its political capital in making difficult structural changes in the economy for delivering on the promises it made to the nation during the election campaign.

Ejaz Ahmad Magoon

Lahore

*****

In a bid to resolve the current financial crisis, the PTI government has decided to approach the IMF to get the bailout package. In the past, PTI leaders used to criticise the previous governments for going to the IMF and taking loans. The new finance minister was unable to foresee and forecast the economic challenges and kept criticising the economic policies of the past government. The reason for the current devaluation of the Pakistani rupee is still unknown. Many believe that the late decision on part of the current government has resulted in this financial chaos.

The PTI-led government has to do a lot to meet the expectations of the people who have voted for Tabdeeli (change). The blame game and will not bring out anything positive. The new government should create a win-win situation for the Pakistani people while negotiating with the IMF and take steps to avoid putting people under unnecessary financial burden.

Sohail Zafar

Rawalpindi

*****

The recent turbulence in the economy is a precursor of what is going to come. It would have been a better option had the PTI government had taken tough measures. People are rightly asking why the current government is approaching the IMF as the previous ones did. Many independent economists are flabbergasted to see the PTI adopting the familiar but failed route. This decision is going to cost the party dearly and it has damaged Imran Khan’s narrative of breaking the begging bowl.

IMF-dictated traditional palliatives – devaluation, increased tariffs of utilities and imposition of indirect taxes – will usher in an unprecedented inflationary pressure, decelerate growth, increase dependence on borrowings and roll back the development agenda. The folly committed by the government would give the opposition a rallying point to mould public opinion against the government. PM Imran Khan should restructure his finance team and induct experienced economists and finance managers.

Kulsoom Arif

Karachi

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