Prime Minister Imran Khan has recently advised the people of Pakistan to stop reading newspapers and watching evening chat shows to avoid anxiety. His approach is not practical and tantamount to burying his head in the sand in the face of rising criticism in the media over his failure to solve public issues.
The Pakistan Tehreek-i-Insaf (PTI) government of Imran Khan has completed almost 16 months in office and critics accuse him of taking U-turns on election promises while his sympathisers still have high hopes of him despite facing the hardest times of their lives. His critics term the poor economy his biggest blunder after Pakistan’s currency has lost 35pc of its value in his rule. He is taunted for reneging on his promise to fix Pakistan’s economy without taking foreign loans while his government has broken all previous records by borrowing $16b in just one year, the highest ever external borrowing in any fiscal year since Pakistan’s creation in 1947. Since the installation of his government, Pakistan’s economic growth rate has also halved – down to 3.3 percent, the lowest in nine years. Prime Minister Imran Khan is also accused of silencing the opposition through the National Accountability Bureau (NAB).
Before blaming Prime Minister Imran Khan for the poor state of economy, one should look at economic indicators before he took office. Pakistan’s current account deficit stood at $2.12 billion in July, 20018, according to the State Bank of Pakistan (SBP). The current account deficit, a major source of concern for the past couple of years, narrowed down 72pc to $600 million in August 2019, compared to the previous month because of a notable drop in imports. Imports slowed down 19pc to $4.47 billion in the first month of the PTI government as compared to $5.49 billion in July, 2018.
Pakistan’s total debt and liabilities had surged sharply and touched Rs29.861 trillion or 86.8 percent of GDP till June 30, 2018, indicating that each individual living in the country owed Rs144,256 on account of the increasing debt burden, according to the SBP. External debt and liabilities had peaked to $95.097 billion on June 30, 2018, posing a serious threat to the country on repayment of its foreign obligations. The external debt servicing consumed $7.479 billion in fiscal year 2017-18. The SBP data showed that total debt and liabilities had gone up to Rs29.861 trillion on June 30, 2018, against Rs25.109 trillion in June 2017, indicating that the total debt increased by Rs4.752 trillion in financial year 2017-18 alone.
The circular debt in the energy chain, which stood at Rs105 billion at the end of Pervez Musharraf’s tenure in 2008, had ballooned to Rs1.18 trillion on July 31, 2018. It was despite the fact that the Pakistan Muslim League-Nawaz (PML-N) government had paid Rs480 billion to independent power producers (IPPs) in December 2013. Gas companies were on the verge of collapse when the PTI came to power. The indicators prove the party cannot be blamed for the economic problems of the country. It can best be accused of not fully realising the situation and acting fast. Otherwise, all indicators show Pakistan was heading to default.
There is no doubt that the country’s economic outlook has sharply deteriorated in the PTI government. Growth remained 3.3pc in the last fiscal year, compared with 5.2pc the previous year. It is forecast to 2.4pc in the current financial year. Inflation is likely to rise to 11-13pc, according to official forecasts. In its annual budget statement, the government said that it had expected a fiscal deficit of 7.1pc this year, down from 7.2pc the previous year. Faced with a large fiscal deficit, higher inflation and lower GDP growth, the government unveiled an aggressive plan for revenue generation through new taxes and increased tax rates in the budget. Subsidies were withdrawn. The foreign exchange rate was linked to market dynamics because of which the rupee devalued significantly. Energy costs have also gone up and the State Bank of Pakistan (SBP) has hiked policy rates.
Prices of all essentials have almost doubled after the rupee devaluation against the dollar and a hike in electricity and gas tariff. Medicine rates have also increased sharply. The government’s policies have only hurt the common people and if more adjustments are made, they would create more trouble for them. Pakistan’s debt and liabilities had skyrocketed to Rs33.3 trillion at the end of 2018, with an addition of Rs3.4 trillion in six months. By December, total losses of public sector enterprises had surged to Rs1.6 trillion, a net addition of Rs192.6 billion or 13.8pc in six months. Almost all industries and traders in the country are resisting taxation measures of the government. It set an ambitious revenue target of Rs5,555b for the current fiscal year, which was slashed later but it still offends businesspeople.
It is a fact that Prime Minister Imran Khan had inherited an economy, which was on the verge of collapse but his attempts to revive it have only overburdened the common people. He had to receive massive loan to pay back interest on loans received by the PPP and PML-N governments. The past governments failed to take timely decisions for political gains and the result was that almost all national institutions were making heavy losses when the PTI government took power in August 2018.
Despite the setbacks, people have still not lost hope from the government and believe it will improve its performance in coming days, because Prime Minister Imran Khan is not corrupt and is working diligently to improve the lives of the common people. As regards NAB cases against leaders of the two mainstream opposition parties, all were registered when they were archrivals. Not a single case has been registered against any leader in the PTI government, except a drug case against former Punjab Law Minister Rana Sanaullah, who was arrested by the Anti-Narcotics Force (ANF) on a tip-off from a Western country.
Prime Minister Imran Khan should tell the people what his government has done for them. He should ask them to wait for results of his policies patiently instead of asking them to stop reading newspapers and watching talk shows. It is a fact that newspapers and channels are trying to create instability in the country with fake news of the toppling of his government. However, rising prices and unemployment are real issues of the people and he should move quickly to resolve them.