Overcoming economic and financial crises

PTI leader and would-be Minister for Finance and Economic Affairs Asad Omer has dropped hints as to what the new government intends to do to address the economic and financial crises facing the country. In an interview, he has claimed that quick fix solutions are needed to tackle the situation and also indicated that the country would need $10 to 12 billion loans within six weeks.
There is no doubt that the country is facing worst kind of financial crunch and the situation has deteriorated to such an extent that even with the onset of new financial years, the Finance Ministry is releasing just salaries and house rent for different ministries, departments and nothing else for other necessary expenditure and their payable dues are piling up to dangerous levels. The government cannot be run in a satisfactory manner in this situation and effective measures will have to be taken to ensure that business of the government runs without hindrance and developmental activities do not come to a halt. This is a major challenge for the new government as there are also enormous expectations of the people who are waiting for some sort of relief from the new government.
However, quick fixes have not helped the economy in the past and in the long run they are unlikely to yield any worthwhile impact. Asad Omer’s assessment that country needs up to $12 billion is an indication that we may opt for IMF loans. This is despite the fact that successive governments claimed that the programme finalised by them with the Fund would be the last one. This also means that IMF loans provided no long term benefit to the economy except offering relief in the face of financial woes and shrinking domestic resources. In the past quick fix solutions included an increase in indirect taxation like hiking taxes on POL products and utilities besides increasing customs duties on imports especially on raw material which lead to price-hike. We hope that the new government prove to be different and instead of adding to taxpayers burden would look for untaxed sectors and individuals.

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