ISLAMABAD: Matters are now in the hands of the right people and they will take appropriate economic decisions. This was stated by well-respected academician Dr Hafeez Pasha who pointed out to Business Recorder that all major decisions were currently being taken by the Special Investment Facilitation Council (SIFC) and would continue to be taken from that forum well after the newly-elected government was installed.
This view was not shared by a senior official member who, on condition of anonymity, told BR that the ongoing political uncertainty, if prolonged, will have severe implications on an already challenging economic situation.
He cited the post-election increase in premium for issuance of bonds in the global market and added that negotiating the next International Monetary Fund (IMF) programme critical to enable the country to meet repayment of all external obligations may face additional challenges in case political uncertainty persists.
‘Country is not getting new inflows from abroad’
He went a step further and expressed serious concerns in case political stability was not restored that may, he warned, create problems in securing the next IMF programme that in turn would create serious balance of payments problems with the distinct possibility of a freezing of bilateral and multilateral assistance inflows.
The official however acknowledged that “the people who matter are very cognizant of the fact that the prevailing political uncertainty is not a good omen for Pakistan economy and they are focused on reaching a settlement one way or another, as soon as possible.”
Kaiser Bengali, former member of the National Finance Commission (NFC) from Balochistan, said that political instability would create hurdles in foreign and local investment and as a result economy would further contract as next IMF program is likely to be loaded with harsh upfront conditions.
He expressed fear that further taxation would fuel inflation that would eventually propel more people below poverty level.
Bengali said that a stable and not a weak coalition government was the need of the hour - a government that had to undertake tough structural economic reforms to set the country in the right direction.
Copyright Business Recorder, 2024
Comments
Comments are closed for this article.