Caving in to traders.
IT is a little difficult to say what exactly happened between the government and the trader community, but one thing is clear: the outcome looks very much like a capitulation on the part of the rulers. After a countrywide shutter-down strike that lasted a day and a half, a compromise was worked out that effectively postponed all decisions till January. The composition of the government delegation, which included the PTI's Jahangir Tareen as the key negotiator, suggests this was more a political solution to the matter than one driven by the economic interests of the state. Clearly, the sight of a shutter-down strike in the middle of the Azadi march was not palatable. On the other hand, the traders had been assured that their demands for replacing the documentation measures in the new tax regime, which is being rolled out by the government after its last budget announcement, with a flat turnover tax would be presented to the IMF for approval. Evidently, this was taken by the traders as a signal that the government was willing to play ball, but that it needed permission from its overlords before making any commitment.
Now we have a very different signal altogether. Postponing everything until January, and allowing political players to enter the negotiations...
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