Some Days in May
The indications are that the Caretaker Government has weathered the immediate financial storm that arose out of the Presidential dismissal of the Nawaz Sharif regime and the dissolution of the National Assembly. After a staggering first week when banks had to import US dollars to meet the rush of depositor withdrawals, the run has been stemmed. Except for those panic-stricken in the wake of the make-up of the Caretaker Government, the rest took notice of the repeated pronouncements of the Caretaker Finance Minister that they would continue the liberal policies of the Nawaz Sharif government. While decrying the Singer, this amounted to support for the Nawaz Sharif Song of the three D’s, Deregulation, Disinvestment and Denationalisation. This was a pragmatic acceptance of the obvious, that the policies annunciated by Nawaz Sharif would lead to the economic betterment of the nation and his far-reaching liberal reforms were starting to permeate into society on a broad front.
The fact that the economy has remained stable after surviving such a shock and has not continued to erode is because of the resilience of Pakistan’s economy, primarily because of the parallel economy that still persists in elongevity and secondarily due to the building up of investor confidence in institutions rather than individuals. As such, Nawaz Sharif, in a perverse way, has helped to stabilise the present Caretaker government, they are reaping the benefits of his courage and far-sightedness in unshackling the hold of the bureaucracy on the economy. What has been done in the way of reforms cannot be immediately undone. Market forces, rather than government instructions, have created an in-built resilience. Recognition of the obvious by the Caretaker Government meant that they shied away from being labelled as Undertakers of the economy, what could have happened if the situation had been handled less adroitly is open to speculation.
