Can Nawaz Sharif Steer Pakistan out of Economic

Can Nawaz Sharif  Steer Pakistan out of Economic Mess

Nawaz Sharif would take oath of the office of Prime Minister on February 17, when the country's economy is close to collapse, despite some good measures taken by the caretakers government which failed to clear the economic mess created by the former government of Benazir Bhutto. The things on the country's economic front is not encouraging enough as the nation with tremendous potential has a forex reserves of just ( $ 611 million ), while it has to pay out a debt liability of ( $ 235 million ) by February end. The export sector performance is as bad as ever during the period of PPP as it declined substantially and figures of the month of January showed an overall fall of 20.45 per cent. Had imports sector not depicted a healthy sign, the trade deficit could have touched a red alert level of $ 4 billion. 

The imports figures till February 11 suggests that there has been a decline of $ 1.028 billion as compared with $ 1.042 billion of December 1996, due to which the trade deficit narrowed to $ 2 billion. The caretakers during their 90-day mandate followed the dictates of IMF regarding the budget deficit of four per cent of the Gross Domestic Product and in the words of Shahid Javed Burki it was in the largest interest of the economy but the PML(N) chief Nawaz Sharif is all out against it terming it against the survival of the economy. Burki during his three-month tenure in finance ministry did some good things for the economy and particularly the SBP ordinance which gave the greater autonomy to the Central Bank to regulate the economy, and the banking and financial sector. But he miserably failed to obtained SWAPS offered by State Bank on 17 per cent interest as in this account only 800 million could be generated.

While a man of Burki stature with excellent exposure in World Bank and American banking industry could not attract a handsome amount, despite the fact the SWAP offer was loaded with a high rate of return of 17 per cent.

Another thing for which Shahid Javed Burki could not be excused is that during the three months rule of caretaker Economic Coordination Committee (ECC) absolutely failed in maintaining the supplies of essential commodities like edible oil, wheat, atta, sugar, and allowed free hand to corrupt industrialists and shopkeepers to loot the poor and helpless consumers. The hard fact is that atta price went up by Rs. 2 per kilogram, ghee prices had a huge jump of Rs. 16 per kilogram, and sugar went up by another Rs. 6 per kilogram which created a chaos like conditions in the country as the industrialists and shopkeepers who had supplies were charging their own prices. 

The result is that inflation went up and general public turned against the government of Malik Meraj Khalid. Now the situation is that national exchequer is empty, and 130 million people were looking towards Nawaz Sharif who has all vision that could change the fate of his countrymen. Nawaz Sharif the man with potential has shown his cards soon after his party's victory when he hinted the re-negotiation of IMF agreements in the larger national interest. Nawaz Sharif has rightly said this, as the ailing economy could not revive without lessening the tax rates, reducing the import tariff on raw material, upward revision of budget deficit to 5 per cent of GDP, besides tax exemptions to the special industrial zones, and export processing zones, revision of power, gas, and other charges of utilities.

The IMF is angry over the policy view of Sharif as now Fund has taken a more hard line stance of “Take it or leave it. Because the Fund has smell revival of economic sovereignty of Pakistan which was put on alter by the successive regimes in Islamabad. Fund's stance of take it or leave could only be met by Nawaz by an equally strong stand, to deter IMF intentions of ruining Pakistan's economy. Nawaz's new government would have to continue with its planning of budget deficit of five per cent of the Gross Domestic Product (GDP) from four per cent as per agreement with the Fund, to bolster the economy, and would have to go for a national debt retirement fund to pay off $ 9 billion worth foreign loans obtained on high rate of interest, on top priority so that the burden of total $ 31 billion foreign credits could be reduced besides savings of Rs. 191 billion worth debt servicing which could be spent on development heads.

Nawaz would have to lower import tariff on raw materials and machinery, due to which the export sector, along with local manufacturing sector, could be revived, creating more jobs and business activity. While IMF agreed clause regarding a cut on high import duty on finished goods should also be re-negotiated, otherwise local industry would be run out of cost. PML(N) government would have to launch a massive and well chalked out campaign for the raising dollar deposits from all over the globe, to strengthen the and remove illnesses of decades. With a potential of raising $ 15-20 billion from overseas Pakistanis bank deposits, Nawaz Sharif government could be successful if their call would be followed up properly.

Senator Sartaj Aziz has rightly said that PML(N) government would pay due attention to improve the balance of payment, cut inflation and revive sick industry. PML(N)  strongly believes in the restructuring of the economy, by a package under which export sector could be revived, bolstering manufacturing sector which during the last couple of years maintained a negative growth of 0.5% per cent  as against 7% per cent during the last three decades.SenatorSartaj Aziz said that new

government would discuss in detail its economic package, under which measures would be suggested to restore 40% per cent of the local industry. He was of the view that “with the revival of industry there would be created sufficient export surplus, revenues generation would improve tremendously with the industrial wheel restarting, subsequently slashing the climbing rate of inflation and providing relief to commoners”.