To panic or not to panic

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ADVISOR to the Prime Minister on Finance and Revenue Shaukat Tarin on Friday conceded that the recent economic uncertainty was caused by external factors, fault lines in certain monetary and government policies and their exploitation by market players.

Speaking at a joint news conference with Advisor on Commerce Abdul Razak Dawood, he, however, sought public patience for a couple of months and regulatory action against banks to cool down inflation, stabilize exchange rate and end uncertainty in the market.

It is not just the firm opinion of economists and analysts but also the general public that the unprecedented inflationary trends are mainly because of policies and actions of the Government and the problem can only be resolved through course correction.

It is good of the Advisor to have acknowledged this reality but mere admission is no solution to the worries and difficulties of the people and it would be naïve to expect continued patience from them especially when there is no indication as yet that the authorities concerned are ready to review the policies.

The Advisor was one of those who previously opposed the stiff conditions imposed by the International Monetary Fund (IMF) and earned appreciation from the masses when he pledged to safeguard interests of the common man.

However, at the end of the day, the country had to accept more stringent conditions of the IMF the implementation of which would make life of the people miserable.

There were also contradictions in the remarks/statement of the Advisor who, on the one hand, advised people ‘not to panic’ (ghabrana nahin) as the situation would improve in a few months but, on the other hand, cautioned them ‘to start panicking after February/March’ explaining that the fuller impact of the conditions agreed to with the IMF would be felt in a few months.

All this shows there would be no respite for the inflation-ridden people and the back-breaking pressure would continue for an indefinite period, as, under the prevailing situation, the next budget too is hardly expected to be people-friendly.

It is also reprehensible that neither the Government nor the private sector is ready to pass on benefits of reduced prices in the international market to the domestic consumers as we witnessed in the case of POL products and edible oil.

A part of the inflation is due to near break-down of regulatory framework as industrial mafias and businessmen have been given clean chit to determine prices of their choice disregarding the ratio of increase in the input cost or the principle of demand and supply.

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