The Pakistan Tehreek-e-Insaf is in a strong position to form the government after winning a majority in the general elections earlier this week. But with power, they say comes responsibility. The change of government is taking place at a time when the country is facing challenges, especially on the economic front and the responsibility of...
The Pakistan Tehreek-e-Insaf is in a strong position to form the government after winning a majority in the general elections earlier this week.
But with power, they say comes responsibility. The change of government is taking place at a time when the country is facing challenges, especially on the economic front and the responsibility of fighting them now lies with the PTI.
As Imran Khan’s party prepares to take charge, we expect the following five things:
Pakistan will go to the IMF
Everyone is convinced that the dwindling foreign exchange or dollar reserves will be the biggest challenge for the PTI government. This is the opinion from stock market analysts to economists and international credit rating firms. Countries across the world need to have enough dollars to be able to pay for about three months of imports. Pakistan has $9 billion but it needs to have more than $20 billion so it can pay its regular debt installment and afford its imports this financial year (till June 30, 2019). In his first speech after the results, Thursday, Imran Khan acknowledged that our dollar reserve levels are the biggest challenge. Asad Umar, the PTI’s main candidate for finance minister, said the same. Umar told SAMAA TV that increasing our dollar reserves is the first thing on his to-do list. He is open to all options, including the IMF. The caretaker government has already done its homework on that front and the PTI government can use that option.
Rupee feared to fall further
Asad Umar (besides economists and international agencies) has also opposed the policy of former finance minister Ishaq Dar to artificially strengthen the rupee. After Dar left, the rupee was in a free fall, dropping by Rs20 against the dollar in the last six months. Analysts say the rupee is constantly under pressure because of our extremely low foreign exchange reserves and will fall further. Responding to a question about his policy on exchange rates, Umar said this should not be a political decision. In other words, the rupee will fall further because he is less likely to intervene.
PTI to depoliticize government businesses (PIA, Pakistan Steel etc.)
There are 200 state-owned enterprises (SOEs) that cost the exchequer Rs650 billion due to mismanagement, politicized leadership and ailing infrastructure. Asad Umar said they will rid these SOEs of line ministries and depoliticize them. The PTI plans to create a wealth fund to transfer ownership of these SOEs and bring in professional managers to restructure them. He said they will not privatize everything because of strategic reasons but he added that they will first fix them and later decide which ones to privatize.
Agriculture to be the focus of policy making
PTI chief Imran Khan had emphasized the importance of agriculture in his post-election speech. Asad Umar seconded this, saying that they would strengthen agriculture and increase its competitiveness. The PTI’s policy will include subsidy optimization, reduction of input costs and agri credit. It will incentivize the sector for value-added exports.
The PTI’s manifesto promises the creation of 10 million jobs in its five-year term. The finance minister-in-waiting said that they will work towards this from day one. Employment of youth is critical for poverty alleviation, he said.