It is almost as if the government brought out the Strategic Trade Policy Framework (STPF) 2012-2013 to counter the State Bank’s Annual Report for 2012-2013, as it tried to put a positive spin on a gloomy situation. The picture painted by the State Bank was gloomy, and was made gloomier by the revelation of the extravagance of ordinary Pakistanis, who increased imports of mobile phones by 668 percent, ladies’ bags 175 percent and dinner sets 498 percent. This seemed to follow the government, whose extravagance in the shape of record deficits led to a fall in domestic investment. In a scenario where the economy grew in 2012-2013 at an anaemic 3.7 percent, the export target of $95 billion in the SPTF may well be so ambitious as to be unachievable. The government would probably not like the State Bank report so close to the coming election, but that should not mean that the government should try to commit the government emerging from it to the trade targets that have been set. That the STPF, which should have been ready last year, was only accorded Cabinet approval in its recent meeting shows the low priority accorded by the PPP government to economic matters, and does not bode well for hopes that it will solve the problems of the common man. In particular, the government must set an example and avoid extravagance, failing which it will provide an unfortunate example to the people, and create unwarranted pressure on the fiscal deficit.
The State Bank is pinning its hopes not just on disbursements of the Coalition Support Fund (CSF), but the auction of 3G licences and the realization of PTCL sales proceeds from Etisilat as well, and that too by the end of the current financial year. While the CSF payments are related to foreign policy, the 3G licences auction will probably not take place in this fiscal year if it involves a preservation of the national interest. Only a sale at throwaway prices would be possible this year, but that would be a process supervised by the caretakers if it is to take place this fiscal year, and if it is not left to the next government to conduct.
The government should face the reality that it is running out of time. Thus it should now do its best to ensure that future decisions are left to the coming government. It should admit its own failures and hope that the government produced by the coming election will do a better job of managing state finances, and the economy as a whole, rather than force targets on it.