Amid the ongoing economic crisis and confusion over the tenure of the current government, economic analyst Dr Kaiser Bengali Wednesday warned that early elections before stabilisation of the economy would be a “disaster” for the country.
Taking to Twitter, Bengali wrote: “Early elections, before inflation and dollar rates are stabilised, will be a disaster.”
He further added that the early polls would increase already high inflation, therefore reduction in non-development expenditures is the “only way to stabilise inflation”.
Bengali echoed the opinion held by the PML-N leadership that the economic crisis should be the priority of the ruling coalition and tough decisions needed in this regard.
Meanwhile, former finance minister Hafeez Pasha said that there was uncertainty about the government’s stance on the country’s economic crisis as Finance Minister Miftah Ismail’s statement was contradicting the strategy coming from London.
A day earlier, the Pakistani rupee dropped to an all-time low of Rs190.02 against the US dollar in the interbank market adding pressure on the government to control the uncertain situation.
With investors losing confidence in the commodity markets of Pakistan, economists and financial pundits stress the need for an immediate revival of the IMF programme.
Pasha further stated that the government should present the next budget a bit early and introduce taxation reforms in it, and also try to reduce subsidies and grant strictly.
“If the government presents the budget for the fiscal year 2022-23 in the last week of May, it would create confidence in the market,” he said, adding that the government can try to stabilise the economy after presenting the budget, and can then move towards elections.”
Pakistan’s reserves are $10.5 billion – not even enough for two months of import cover. If Saudi Arabia takes out $3 billion, then we will hardly be left with a one-month import cover. If there is no IMF and we are left with one-month reserves, even the World Bank or Asian Development Bank will not give funding to us. There has been talk that the Shehbaz-led government wants to complete its tenure so that it can give two budgets. This year’s budget will be a tough one with a high increase in petrol and power prices. If elections were to take place in October, the government would have to dissolve the assemblies after the budget. But if the government stays till 2023, then it will look to stabilize the economy to some extent and then go into elections after giving an election budget next year – with a tailor-made narrative of having saved Pakistan from the brink of default. But none of this is possible if the government is not allowed to make decisions on its own. For all the talk about ‘interference’, who would have imagined that the London ‘interference’ would also be something to have to be contended with? If the government is to continue dithering, it may well dissolve the assemblies right now, bring in a caretaker setup which will take tough decisions, and hold new elections in three months.
A government with one prime minister and one finance minister can function but a government being run by two finance ministers and two prime ministers will be ungovernable.
Bengali echoed the opinion held by the PML-N leadership that the economic crisis should
be the priority of the ruling coalition and tough decisions needed in this regard
