THE task of trying to get money from foreign governments isn't left any more to the bureaucrats in the ministries of finance or foreign affairs. The President does it himself as well. And it isn't just donor conferences that these pitches are made at, but at all possible instances of contact between the government and any and all foreigners. The latest was a US congressional delegation at the Presidency. This is, of course, a comment on the desperation of the government. The desperation is not unfounded; waging a war is an expensive proposition and we just might stand to deplete the fiscal space we had managed to get from the IMF and the World Bank in the first place, money that was supposed to be used for other, developmental, ends. Moving from the fiscal to the monetary front, the State Bank of Pakistan continues to keep the interest rate at its current level. When viewed from outside the central bank's framework, it is a continuation of an exorbitantly high mark up rate. But in State Bank's own eyes, not jacking it up even higher is the closest to bringing it down that they can do. The policy of high interest rates is attracting a lot of criticism from many quarters, mostly businesses that borrow from the banking sector. State Bank has been continuing a policy of high interest rates for some time now, they say, and it hasn't yielded any positive results. Though the CPI inflation is estimated to come down to 12 percent, the average rate of inflation would be around 20 percent and that, too only if the 12 percent rate for June actually is achieved. This is, however, not a simple situation. Having a high interest rate has an arresting argument for it; it would help in squeezing the excess liquidity out of the money markets. The contrary argument, however, is not without its merits: just how much excess liquidity is there in the money markets? Our economy has a large informal sector, as a result of which the high interest rates won't help cutting general inflation but will cut off credit lines to small and medium businesses throughout the country. Our GDP growth, projected to be a dismal 3.7 percent, can be helped if businesses throughout the country are facilitated in the form of effective and timely credit provision. The political situation isn't making things any better for the economy. If the uncertainties of the situation in the tribal areas and Swat weren't bad enough, the lawyers' movement threatens to bring disorder, if not quite violence, to the capital. This is not to cast an aspersion on the validity of the lawyers' demands but to make a comment on the inability of the political government and its opposition to work out an arrangement that would not lead to a confrontation. It's still not too late.