The Package
When Moeenuddin Qureshi was selected by consensus as a neutral person who would be a credible Caretaker PM entrusted with the responsibility of holding free and fair elections in the country, the internationally renowned economist factor was taken as an additional plus point to deal with an economy in dire financial straits. In less than a month he has put in motion for implementation such politically tough decisions that we used to write and dream about. For many years the vast majority of the people of Pakistan have suffered while their leaders have dithered and played politics about doing the right thing, suddenly out of the blue comes a person who not only promises to do the correct thing, he proceeds to act upon them. Unfortunately the financial cupboard is so bare, his parallel economic decision to increase prices across the board will effect the masses who will have to bear further privation due to commensurate rise in prices of essentials. This burden may become politically unbearable despite the obvious necessity in the adverse economic circumstances.
State of the Economy
Eighteen months ago, the Pakistan Rupee was pegged around 18 to the US dollar, at that stage one felt that it should have been closer to 20. The gap between our perceptions and that of the State Bank of Pakistan has been consistently Rs 2 or 10%, almost as if 10% was the margin kept as “Reserve for Unforeseen”. Creeping devaluation, average rate of paisas 10 every month, has managed to keep a tight control in a volatile Economic situation. Ashraf Janjua, Economic Advisor to the State Bank of Pakistan, had an excellent Question and Answer session with economic journalists on Monday April 24, 1989, it seems both sides learnt to some extent the craft and perceptions of the other. Mr Janjua earlier had given an excellent dissertation of the approach of the State Bank to fiscal policy, his candid views were very refreshing. Though Mr I A Hanfi, the Governor of the State Bank, missed the function due to an unscheduled but fortunately successful operation of the gall bladder, his gall at the scope and intent of even permitting such an open discussion, seldom previously attempted, was exceedingly welcome, no doubt encouraged by the standards of frankness instituted by his predecessor, Mr V A Jafarey, now the Advisor to the PM on Finance.