Apropos BR editorial 'Why government first is not the right strategy', there is a growing realisation or frustration among the officials of Ministry of Finance that their political bosses often ignore advises proffered by State Bank of Pakistan. The fiscal managers unnecessarily found such 'advices' as an affront to their competence and ego.
Their stubbornness has led to worsening economic indicators. For example, what do they have to say for their failure to convert state-owned enterprises (SOEs) into commercially-run businesses and reduce dangerously high fiscal deficit? Nor are there any efforts aimed at improving the infrastructure to help revive investment.
As argued by the Leader, sustainability of banking system, inflation and price stability are the prime responsibilities of regulator, SBP. But the regulator is also required to provide a highly objective assessment of country's macroeconomic indicators even if it displeases the government of the day. The role being played by President of the European Central Bank (ECB) Mario Draghi in relation to Eurozone's woes is a case in point. In Pakistan, a dialogue needs to be initiated and a plan to restructure this domestic debt needs to be evolved before a default explodes, the prospects of such an eventuality are indeed grim. The government is required to take all necessary remedial measures to bring to an end increasing economic uncertainty caused by, among other factors, falling forex reserves and dangerously high fiscal deficit.
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