Time for hope or doom

The foreign currency reserves have gradually depleted to less than ten billion from a high of over $16b, hardly sufficient to finance the projected $18b trade deficit. The food inflation of 32 percent is unsustainable by the poor who are already suffering due to energy and food rising costs and shortages. The previously buoyant stock market index has crashed to a level of around 10000 from a high of around 15000 wiping out billions of rupees of investors. The parity of rupee to all major currencies has nose-dived by over 18 percent in the last three months after the stringent measures by the central bank were too little and too late enhancing the cost of imports, national debt and flight of capital.

The investor confidence has evaporated due to the downgrading of the country ratings by Standard and Poor and Moodys shattering any possibility of foreign investment in the near term. The unending political wrangling has left no time to attend to ensuring internal stability and economic discipline or to control law and order that has scared even the wealthy Arab investors for whom Pakistan presents an ideal capital parking location. Our northern, eastern and western borders are in a war zone where our army and security forces have been deployed to fight insurgencies and terrorists who now control the bulk of our tribal areas. A direct American (or others) interference in our internal affairs and escalating violation of our space by NATO forces has polarised various segments of our people. The menace of Talibanisation has now crossed from the tribal into settled areas up to Karachi that threatens the well-being of the state and its people.

Our leaders must apprise the public and the parliament of our financial dilemma that incidentally is no different to the Indian or other regional economies. The global commodity prices notably oil and food have risen dramatically (lately showing a downward trend). The price hike and government overspending combined to generate double digit inflation. The State Bank governor has publicly warned that such spending and heavy government borrowing made inflation control impossible.

A balancing act between growth and inflation will have to be made at the cost of many economic programmes in view of the rising fiscal deficit. If corrective measures to assimilate the adverse consequences of the global recession are delayed, this worldwide phenomenon will hurt us more severely than other nations that are in better control of their economies and politics. As a first step, the promised policy of an austerity drive at the highest level and curtailment in the extravagant expenditures on the VIP security and movements must be strictly enforced so that the leaders can be seen to identify themselves with the poor of this country and not be classified as their rulers. We are among the few troubled nations of the world in urgent need to find solutions. Instead, our leaders are embroiled in issues leading to confrontation and divisions. If it is not the judge's issue, it is the presidential election or another will be created. Where is the spark of dynamism the prime minister had shown, or the spirit of reconciliation in Sindh and the brotherly affection for Nawaz Sharif that Asif Zardari had exhibited? Are the people of Pakistan condemned to be disappointed by all their rulers?

The writer is an engineer and an entrepreneur