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Could Claims of a Turnaround Be Delusional?

32 0
11.10.2024

The leadership – economic managers, bureaucracy, politicians, and establishment - these days is busy convincing the masses and the corporate stakeholders on how the economy stands turned around and happy days are just around the corner. Well, in essence, nothing wrong with it since perception is sometimes important in economic turnarounds, but on a more prudent note, our economic managers need to be careful with their claims, because sooner than later these need to be backed by some competent economic management, key reforms and sustainable results. Also, the danger is that often such persistent cum exaggerated rhetoric can get delusional where the policymakers actually start believing their story, thereby taking their eye off the real reforms and dispensing the economic governance that is truly needed to correct the course. Needless to say, if the managers carry the baggage of past failures and some poor economic decisions in the past that perhaps led to the present quagmire in the first place, the repercussions of this make-belief world could be rather grave, thereby pushing the country towards yet another lost decade or maybe even longer! The government today is taking credit for an improvement in macro-economic indicators, such as inflation, interest rates, current account deficit, reserves, and a relatively stable Pak Rupee, and then of course for sealing a deal with the IMF, and finally for increasing revenues through an aggressive tax regime. However, what is important here is to realise that in reality, the macro-economic indicators are more of a global phenomenon than Pakistan-specific ones, since interest rates and inflation are generally coming down in almost all global economies; as for our reserves, they stand on rather thin ice, since the figure, in essence, stems from borrowing with an almost $108 billion debt payment/restructuring staring at us from the other end of the barrel; the Rupee stability is largely owed to house-correction within the governmental corridors rather than via the preferred way of an investment cum surplus bulge resulting in a currency momentum; and for securing the IMF and the draconian tax policies, one is not sure whether to........

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