Business Recorder op-ed writer Dr Omer Javed deserves a lot of praise for articulating a highly informed argument on “Debt and fiscal space”. That this writer is prolific is a fact.
Myself and many other students of economics and finance are among avid readers of his writings. Having said that, I wish to state that while the word ‘debt’ has a clear meaning and message the words or phrase ‘fiscal space’ is explained or understood in varied ways.
I would request the learned writer to also enlighten this newspaper’s readers through one of his forthcoming columns about the difference between phrases such as ‘fiscal deficit’ and ‘fiscal gap’.
He may throw some light on terms “fiscal needs” and “fiscal capacity”; gross domestic product (GDP) and gross national product (GNP) as well. I would like to request him to inform us how a fiscal gap occurs even in the economies that experience desirable revenue-expenditure asymmetries. Of course Pakistan is not one of these economies because ours is a country where successive governments have failed to create fiscal space by taking the required steps, including raising taxes and cutting current expenditure.
Since the last two years of Gen Musharraf’s rule till now, all the steps aimed at creating fiscal space taken by governments have compromised macroeconomic stability. Whatever the incumbent government of Pakistan Democratic Movement (PDM) has done so far, for example, has got nothing to do with the country’s fiscal sustainability or microeconomic stability, so to speak.
Huma Naeem Ahmed Siddiqui (Karachi)
Copyright Business Recorder, 2023
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