EDITORIAL: Three months after the general elections that were expected to presage easing of all political uncertainty paving the way for economic stability that all stakeholders and associated media pundits insisted would be a key factor in turning the economy around are having to deal with a major wheat scam that has Punjab farmers protesting on the streets, the acceptance by the State Bank of Pakistan that there were mistakes in the Urdu text on currency notes only after it was pointed out by the ombudsman and one conflict arising from the Punjab police heavy-handedness against the lawyers.
The wheat scam, in a nutshell, can be traced back to the decision by the caretaker finance minister, no doubt supported by the caretaker prime minister who kept portfolio of National Food Security and Research, to allow the private sector to import wheat at a time when the projected target for the coming season was enough to meet the country’s consumption needs.
The decision to import wheat, farmers lament, has disabled the Punjab government from procuring wheat and compelled them to sell at prices way below their costs. Disturbingly, the caretaker finance minister has reportedly refused to appear before the inquiry committee and the caretaker prime minister is defending his government’s decision by insisting that he operated on information available at the time and that by allowing the private sector to import his government was not doling out cash for the purchase.
That is certainly true; however, two observations are in order: (i) the decision to import was taken at a time when foreign exchange reserves were extremely scarce and import restrictions were in place to strengthen balance of payment position; and (ii) the state funds used for wheat procurement by PASSCO (Pakistan Agricultural Storage and Services Corporation) or TCP (Trading Corporation of Pakistan), are earmarked in the budget; however, they are recovered as and when the government releases its stock of wheat purchased from the farmers.
The wheat scam therefore indicates that the caretakers were at best not knowledgeable enough about the matter and inadvertently allowed the current impasse or at worst deliberately incentivised the private sector for material gain. Either way, this must bring it home to parliamentarians that the caretaker mechanism must be abandoned.
Some heads should have rolled as far as SBP’s (State Bank of Pakistan’s) faux pas is concerned. While usually the head of an institution resigns even if he has no direct involvement in a mistake having occurred; however, in a country where passing on the buck by members of the executive, bureaucracy, and hard won constitutional positions like the governorship of the SBP, is the norm resignations are rare. One would hope that the SBP takes appropriate measures to ensure that its review mechanism functions better than it clearly did in this instance.
And finally, the clash between the lawyers and the police in Lahore was reminiscent of similar scenes during past administrations. The Chief Minister of Punjab stated on X, formerly twitter, that she had not directed the police to arrest lawyers.
While Business Recorder is not a supporter of violence by lawyers (wukala gardi) yet it is unclear whether the Punjab Chief Minister discussed the matter with the provincial law minister or bothered to find out exactly who summoned the police (reportedly it was the Chief Justice of Lahore High Court) and who gave the orders to use batons and tear gas on the lawyers.
Merely absolving oneself of all responsibility is almost reminiscent of Governor SBP’s silence on the failure of his institution to first identify and then correct the mistakes in the Urdu text of the incoming banknotes.
These three instances are independent of any involvement of the opposition and reflect mismanagement at best, outright incompetence at worst. This in the face of ever-rising electricity rates as pledged to the International Monetary Fund in an attempt to attain full cost recovery (instead of improving the management of the sector as is required) and failing to compel the traders to register to widen the tax net with only 70 traders out of 3.2 million meeting the 30 April deadline to register (though there is optimism that negotiations would be successful between the Federal Board of Revenue and traders) the outlook appears bleak.
It is, therefore, imperative that the government deals with scams by making heads roll, and those who refuse to appear before an inquiry committee as reportedly the caretaker finance minister refused, must face very serious consequences.
Copyright Business Recorder, 2024