IT is not easy at all to understand the economics of the present government, and there still appears to be some confusion in the official mind over what its main function is. At one end of the spectrum, there is good news, with Standard&Poor raising its rating, while at the other, there is a confirmation that 30 million people, or about a fifth of the total population, live below the poverty line. The blame for this impoverishment of the Pakistani people is placed at the global financial crisis, but following a trend that has become obvious for some time, there has been a further decline in the international price of crude oil. The Standard&Poor rating has been upgraded because Pakistan has come onto an IMF programme, and has received IMF assistance. The upgrading has been made dependent on Pakistan sticking to the IMF prescriptions, thereby revealing the apparently independent and objective rating agency as another enforcer for the IMF. The oil price decline has not yet been reflected in any of the prices that have risen because of the increase in fuel prices, even though this is an area where the government is not just authorised, but is the sole authority, in setting prices. Indeed, the oil price decline worldwide has not been fully reflected in local prices. Add to this the number of the poverty-stricken. The State Bank Governor is personally committed to microfinance as a means of taking the poor out of poverty, but she has an uphill task if the rest of the government is not on the same page. The State Bank strategy for microfinance is to encourage the banks to extend credit, but if the bank heads, who are government appointees, look at microfinance as a burden rather than as something essential for the health of the economy, the Governor's strategy will not work. The government should stick to basics, like cutting unnecessary expenditures and pursuing strategies to encourage trade, agriculture and industry, if it hopes to improve the economy.