Politics of economy.

THE slide seems unstoppable. The finance minister's balancing act in the budget has failed to end the anxiety. The free fall of the rupee against the dollar continues as inflation marks a new high. The government's hopes of sealing the IMF deal and the promise of a bailout from friendly countries have yet to be realised. The spectre of default stares us in the face.

Both the government and the opposition seem to agree on the severity of the situation but blame each other for the crisis. With the reversal of their respective roles, the narrative has also changed. Just a few months ago, while in the opposition, the PML-N was out on the streets protesting against the spiralling cost of living and accusing the PTI government of selling out to the IMF.

But now in government, the PML-N leaders' tenor has changed completely. Inflation is being driven by rising international commodity prices, we are now told. External financial support is deemed critical to prevent insolvency. While conceding that the increase in fuel and electricity prices will stoke inflation, the finance minister contends that the measures were necessary in order to reverse the devastation caused by mismanagement in the past four years.

Miftah Ismail's budget speech echoed the PTI finance ministers' accusatory rhetoric blaming successive governments for the mess. He has promised to put the economy back on track. While warning of tough times ahead, he has pledged to set 'strong foundations of economic development that is based on sustainable growth'.

It is politics that has put the country's economy in a perpetual state of crisis.

It is a familiar mantra that was adopted by previous finance ministers as well. It is certainly a very tall order given the short span of the government's term. The budgetary proposals are not very different from the previous ones except for some change in emphasis and the tweaking of taxation measures.

As one senior PML-N leader admitted, the budget proposals reflect the agreement with the IMF made by the previous government. There are no fundamental structural changes that could ensure sustainable economic growth. The budget document also reveals the predicament of a government trying to meet IMF requirements, with an eye on the coming elections. Giving the narrow political and fiscal space available, there is little room for initiating any structural reform. In fact, it is more a matter of how to manage the economy and prevent an economic meltdown.

...