ISLAMABAD: Failure — one word that precisely explains the outcome of first eight months’ economic policies of the PTI government.
Almost everything that the PTI has been resisting before coming into power, it is doing now. Anything that it had promised to do, it has failed to deliver. The irony is that despite all this, the government’s economic policies are far from producing expected results. Instead, almost every economic indicator is ringing alarm bells.
The PTI had committed to double the tax revenue, explaining that the people will pay tax when they will find those sitting in the government “honest”. Imran Khan government also launched an austerity drive soon after coming into power to show the people that the taxpayers money will not be wasted. Yet, the first nine months revenue collection figures show a record shortfall of over Rs300 billion and it is feared that the figure will reach anywhere between Rs450 billion to Rs500 billion by end of this fiscal year.
Imran Khan has been repeatedly quoting Rs30,000 billion figure of Pakistan’s total debts and liabilities to assert that due to the corruption of PML-N and PPP government, the country has been put under such a heavy debt burden. After coming into power, he also announced to do the forensic audit of the huge borrowing of almost Rs24,000 billion during the last ten years of PPP and PML-N tenures, to ascertain in whose pockets this money had gone.
However, during the last nine months of the present fiscal year, the government borrowed Rs3,300 billion only from the State Bank of Pakistan, which is far more than before. If the foreign loans that the PTI government has received from Pakistan’s friends like Saudi Arabia, UAE and China are added to the figure of Rs3,300 billion, it will cross Rs4,000 billion figure. It means that borrowing of PTI government has been more than double of what was the situation during the last PML-N government.
PTI had committed that it would address the issue of circular debt through good governance and other administrative initiatives. But, instead of checking the circular debt, it started rising enormously during the PTI government. The circular debt figure was around Rs1.1 trillion when the PML-N left the government but now the figure has reached close to Rs1.5 trillion. It is said that each day almost Rs2 billion is adding to the circular debt.
PTI promised to give 10 million jobs and construct 5 million houses during its tenure, which is only possible by phenomenally increasing country’s growth rate from the previous years. But, after coming into power, the PTI government’s economic policies drastically slowed down the country’s economic growth, which as per the latest report of the Asian Development Bank will decelerate to 3.9 percent in the fiscal year 2019. The growth rate during the PML-N government last few years was 5.8 percent.
The PTI, when in opposition, has been strongly opposing any raise in prices of gas, electricity and petrol. For Imran Khan, such increases in the past were like “bomb” for the masses while Asad Umar had committed when the PTI would come into power, the petrol price will be reduced below Rs50 per litre. He had also said in his speech in the National Assembly that the gas prices in Pakistan were the highest in the world. However, the PTI after coming into power has enormously raised the prices of gas, petrol and electricity.
On January 1, 2018, Imran Khan, while responding to the then PML-N government decision to raise the prices of petrol items had tweeted: “Absolutely shameful how the government has dropped a petrol bomb on the poor nation at the start of 2018. Instead of undertaking tax reforms and cracking down on money laundering, the government continues to burden the masses- this time with a big increase in petroleum products’ prices.”
Fourteen months later on March 31, 2019, the Imran Khan government announced a major raise in petrol prices with effect from April 1, 2019.
The PTI has always been saying that its economic policies will be poor friendly. In practical, after coming into power the inflation rate continues to rise and has reached 9.4 percent from what was below 4 percent during the last PML-N government. It means that the life for every Pakistani including the poor, has become almost double the expensive than what it was one year back.
The PTI government devalued the Pak rupee against US dollar over 30 percent as it now crossed Rs142 against one dollar. This unprecedented devaluation of Pak currency was done with the government expectations that it will boost country’s exports, which though showed only 1.8 percent improvement.
The PTI had promised that it would bring back $200 billion of Pakistanis stashed in foreign accounts. The PTI had also opposed amnesty scheme launched by the PML-N government and termed it beneficial for tax evaders, looters and plunderers.
However, after coming into power despite government’s enthusiasm to bring back billions of dollars from foreign accounts, the government has now lost hopes in this respect.
Like what the previous governments have been doing, the PTI government while taking a U-turn has now announced that it will launch a new amnesty scheme soon in order to encourage Pakistanis both within Pakistan and outside to declare their untaxed wealth.
PTI top leader Jehangir Tareen, who was disqualified by the SC, in a recent TV talk show also raised questions about the economic policies of the Imran Khan government.
Information Minister Fawad Chaudhry, however, when contacted told The News that the PTI government’s economic policies are aimed at correcting the fundamental wrongs of country’s economy owing to which there is an economic slowdown. He, however, insisted that the thing would start improving, visibly, from the first quarter of the next fiscal year.
Fawad Chaudhry explained that instead of following the faulty policies of PML-N and PPP governments, the PTI government is pursuing the difficult path of making substantive changes in the economy.
The minister explained that the fundamental changes of the PTI government include i) encourage exports and reduce imports; ii) check money laundering; and iii) documentation of the black/undeclared economy.
Fawad Chaudhry said that the PTI government’s economic strategy will be a long lasting solution but will create some short-term difficulties. Regarding not so encouraging export figures despite massive devaluation, he said that much improvement in country’s exports would be seen in the next three months.
(This news/article originally appeared in The News on April 4th, 2019)