Finance Minister Sartaj Aziz, State Bank governor Dr Mohammad Yakub, vice-chairman Planning Commission Hafiz Pasha and secretary finance Moeen Afzal are all fairly personable characters. Left to their own devices, each could lay claim to being a gentleman and scholar with whom one can break bread and share a lively discussion on everything under the sun — from China’s convulsive transformation or the tranquilities of sufism to the economic equations of Hajj and the unbounded joys of cricket. As an unholy quartet, however, they are a cruel, perverse and menacing lot. Consider their collective record under solemn oath of upholding public office.
In June 1997, they informed us that GDP growth in FY 1996-97 was about 3.9%. A year later, however, they claim it was not 3.9% but 1.3%. The statistics were fudged so that, starting from a low base last year, they could claim a high GDP growth of 5.4% in FY 1997-98. Next June, therefore, we can be sure they will say that GDP growth in FY 1997-98 was 3.5% so that they can claim credit for GDP growth of 5.5% in FY 1998-99. Despicable!
Last year, they claimed that all bank loan defaulters would be dealt with ruthlessly and indiscriminately. Since nothing of the sort happened, this year they have made a cunning distinction between “willful defaulters” and “economic defaulters” so that the chosen many are let off the hook and an unfortunate few are taken to task. Shameful!
After the nuclear tests, they claimed that imports would be restricted by 15% in FY 1998-99 in order to balance the yawning gap between imports and exports. But in the budget they stunned everyone by liberalising the import regime — maximum import duties were reduced from 45% to 35% and luxury cars were made available cheaply. Now they have tried to cover their tracks by slapping a hefty regulatory duty on imported luxury cars and raising the currency rate for most imports. Ridiculous!
Before the budget, they were insistent that there would be no devaluation. Barely two weeks later, however, they were ready to devalue the rupee by 4.4%. Once again, they said that there would be no more devaluation. Once again, however, their fib has caught up with them. The economic package unveiled on June 21st makes a mockery of the exchange regime. It kicks off with a controlled devaluation of 15% (the average of the current official rate of Rs 46 per dollar and the market rate of Rs 58 is Rs 52 which is about 15% above the official rate of Rs 46) which threatens to rise to 20% if the market rate shoots up as expected. Absurd!
After the forex accounts were frozen on May 28th, they said resident and non-resident depositors had until August 31st to translate their dollars into rupees and withdraw their deposits, failing which they would not only have to disclose the resources of their deposits but also pay tax on them. At the beginning of July, they changed tack and said the cutoff date was July 31st. On July 21st, however, they did a double take and announced that resident Pakistani depositors would not be treated at par with non-resident Pakistanis — the former could go jump in a lake with their worthless rupee or bound while the latter could now obtain dollar interest on their dollar bonds — but all could claim exemption from taxes or scrutiny. Shocking!
Before the budget they said that sanctions would lead to a loss of only US$ 1.5 billion in external funding. But they conveniently forgot this when they made the budget and went on to announce that as much as US$ 3.2 billion in external resources would be forthcoming from various sources. But truth will always out. And when it did, they quietly called in an international company with expertise in managing a debt moratorium and started talking terms with it. Disgusting!
Before the budget, they said that everything was hunky-dory and no new taxes would be imposed. But the budget put paid to that when the tax burden was calculated to have risen by Rs 50 billion. After the budget they said there would be no mini-budgets. But one lie has been heaped upon another. First, the price of petrol was raised by 25%. Then a host of new measures were announced on June 21st in which the Public Sector Development Programme was cut, devaluation was affected and exchange controls were imposed. Pathetic!
If this isn’t a damning story of missed opportunities, miscalculated losses and blatant lies, we don’t know what is. In any functioning democracy, such dysfunctional decision-making would have taken its toll of the errant makers. But not in Pakistan. Our plight is compounded by the fear that the unholy quartet is here to stay. Until the economy has been bung, drawn and quartered, that is.