Addressing poverty to spur economic growth.

Byline: Jawaid Bokhari

In times of severe economic crises, it is not business as usual. It is the political economy that tends to play, sooner or later, the primary role in setting the correction course, particularly during the transformational phase in an extended period of hard times.

Responding to mounting domestic business, citizen and political pressures to revisit the government's policies, Prime Minister Imran Khan has reiterated that his foremost priority is to run the economic system on a sustainable basis: a system which would help create job opportunities, enhance investor's confidence and promote local industry. His focus is also shifting to achieving price stability to subdue the growing double-digit rate of inflation.

In this endeavour, the prime minister has called for regular meetings of his economic team so that enhanced inter-ministerial coordination is ensured for formulation and implementation of policy decisions. The finance team may have to be more receptive to what other economic ministries have to say. Currently, it is too preoccupied in tackling challenging twin deficits while dissenting voices are becoming louder that it needs to look at a much bigger picture. The prime minister has himself started weekly monitoring to ensure that ensuing problems are quickly resolved.

The finance team is too preoccupied with tackling the twin deficits to look at the bigger picture and be more receptive to what the other economic ministries are saying

Similarly, the powers to allow supplementary grants have been transferred to the federal government from the finance division. And no grant was issued during the first quarter of the current financial year.

The policy to boost tax revenues at the cost of looming de-industrialisation seems to be under review. For relocation of Chinese industrial units to Gwadar and for installation for machinery and other equipment at the port, the government has granted a 23-year tax exemption to China Overseas Ports Holding Company. There is some official talk of exchange rate stability and policy rate coming down early calendar year 2020. The pickup in economic activity may yield better tax revenues.

No doubt the immediate problem is to stimulate investment and shore up the sagging manufacturing sector when the private sector borrowings from banks are showing an alarming negative trend. In the first quarter of the current fiscal year, the private sector retired Rs49. 39 billion as compared to net...