Bankruptcy avoided

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IT is because of the crisis management skills of Prime Minister Shehbaz Sharif that with each passing day Pakistan is stabilising both in terms of economy and politics and focus is gradually shifting to resolution of the core economic challenges of the country.

Therefore, the Prime Minister had a point when he told a gathering of members of PML(N) and allied parties that the last government of PTI brought the country on the verge of default but the policies and measures introduced by the coalition government has avoided bankruptcy.

It is a universal truth that the previous government first agreed on tough conditions with the IMF but then opted to violate the understanding, triggering economic and financial crisis.

It is also a fact that the new government could not get rid of these strict conditions but found a way out to go forward by taxing the affluent people for the sake of the poor and the country.

It is because of the successful negotiations with the IMF that an agreement is now in sight and this already has a positive impact on the overall economic and monetary situation of the country.

Our great friend China has already deposited $2.3 billion in the State Bank of Pakistan to help strengthen the dwindling foreign exchange reserves and an agreement has been inked with France for rescheduling of $107 million debt which will now be repaid in six years.

Hopefully, similar agreements would also be signed with some other countries and as a result the country would get fiscal space to manage its affairs.

It is also because of the foresight of the PM that an edible oil crisis has been averted – thanks to the Indonesian President who agreed to ship a huge quantity of the commodity to Pakistan following his conversation with Mian Shehbaz Sharif.

Though the prices of edible oil and ghee are still on the rise in the domestic market, the timely measures of the Government prevented a steep escalation of their prices.

As for crippling load-shedding, the new Government has not been able to live up to its commitments of bringing the menace to zero within days and weeks but it is satisfying that both short and long term measures are being taken to overcome the shortage on a sustainable basis.

The PM has hinted at increased power outages during July as the country could not secure LNG consignment timely but after a high-level meeting of civil and military leaders, arrangements to import coal from Afghanistan have been finalized and it would be transported to the country by rail and trucks and consignments would start arriving in August.

It is also important that the import of good quality Afghan coal would result in saving $2 billion annually and payments would also be made in Pakistan rupee and not in dollar, thereby reducing the pressure on the precious foreign exchange.

On the long-term basis, the Government is promoting solar energy for homes and generation of about 5,000 MW of solar electricity that would help bring down the soaring electricity tariff because of a sharp increase in the prices of oil in the global market.

The attempts to bring down electricity tariff are appreciable as both original cost and fuel adjustment charges are becoming unbearable both for the industry/businessmen and the general consumer.

This is evident from the fact that on Monday, the NEPRA approved an unprecedented Rs.7.90 per unit additional fuel cost adjustment for distribution companies for May this year with a warning that Pakistan was left with no choice but to face load-shedding or generate electricity using expensive fuel oil.

The measures taken by the coalition government were, no doubt, necessary in view of precarious economic conditions of the country but the Government also needs to realize that people were not in a position to bear additional burden.

The Prime Minister has maintained that the super tax had been imposed on affluent people and owners of high-earning industries for one time and not on commodities and items like iron and textile.

However, industrialists and businessmen have made no secret of their plan to pass on the full impact to the general public and this would mean the super tax will also have to be paid by ordinary people. This should be a source for concern for planners and decision-makers.

 

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