Past Govt, SBP ruined economy

We are already in deep economic crisis which has been making for the last many years but the previous government was painting rosy picture of our economy, said Rasool Bux Rais. The infrastructure was so weak and not been able to growth export. The previous government did not really invest in energy and agriculture sectors, while the other countries have been exploring alternative energy.
To control the food inflation, we will have to pay attention of agriculture sector, the backbone of our economy, which will help open up vistas of jobs. He said the government will have to subsidies the agricultural inputs. The tax net should be enhanced broadened.
Economist Farhan Zaidi said that the economic managers need to adopt both short and long term policies to bring the country out of present economic and financial crisis. According to latest statistics Pakistan has fifth highest inflation rate in the world after Venezuela, Russia, Egypt, and Sri Lanka. Constant rise in oil prices is not the only reason for our inflation but there are number of multiple factors behind it including poor governance and excessive spending on government establishments and ministers.
The overall inflation in the current fiscal year is around 16.5 per cent compared to the widely cited range of 8-9 per cent by the government officials. Similarly, the food inflation rate reached 21 per cent during the period July-2007 to February-2008.
A comprehensive set of actions is needed to control the deficits and inflation. A piecemeal and ad hoc approach will only exacerbate the economic woes and is likely to backfire in the next 12 months. The economic disease facing the country needs special attention and treatment, a tablet of aspirin cannot work when a strong doze of anti-biotic is needed to kill a fast spreading virus.
Oil companies all over the world are almost arbitrarily implementing the oil pricing formula, which only benefits them virtually every stage in an unfair and non transparent manner. They violate the fundamental principles of market-based pricing and deregulation. When the prices are calculated and implemented, consumers did not know the mechanism of this intricate system which finally benefits the companies.
One of the ways to reduce current account deficit and control anti inflationary trends is rationalization of import policy and review of national economic priorities. We must discourage non-essential imports and facilitate imports of raw materials and primary food items at lower tariffs.
Last week's report of the Asian Development Bank (ADB) further strengthened the already widely held belief that the country is heading towards double-digit inflation. The report estimated inflation at 10.3 per cent in 2008, a sharp increase from 7.9 per cent last year.
But many economists say the real inflation rate is more than 12 per cent. They say authorities should not wait until July, when the next yearly economic review is due, to take measures such as clamping down on the government's rampant domestic borrowing.
They said the central State Bank of Pakistan (SBP) was printing too much cash to satisfy the government's appetite amid dwindling foreign exchange reserves, rising import costs due to high oil and food prices, and low tax collection internally.