The Emergency

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The emergency


Farrukh Saleem
Sunday, May 20, 2012

We need a colossal $24 billion just to survive the following 24 months. Imagine; our imports are growing twice as fast as exports and the current account over the following 24 months will be in the negative to the tune of $9 billion. The IMF and other debts in the amount of $15 billion have to be paid back. The oil import bill just by itself is going to be $15 billion a year or a total of $30 billion over the following 24 months (on the assumption that the international price will stay under $100 a barrel).

Imagine; we accumulated a total of Rs6 trillion debt beginning in 1947 till 2008. Over the past four years our debt has gone to Rs12 trillion.

By the end of the next financial year our foreign reserves will be next to nothing. Foreign inflows – other than remittances – are at a historical low. In the next three to six months, the IMF will be the key – can’t live with it, can’t live without. Every other multilateral and bilateral donor will be taking the cue from the IMF.

Budget 2011-2012 has proven to be a total farce, complete fiction. A sum of Rs70 billion was expected from privatisation. Nothing done. An additional $800 million was to come through the auction of 3G licenses. Nothing done. Etisalat was expected to pay $800 million. Nothing done. A billion dollar transfer was to take place in the form of Coalition Support Funds. Nothing done. An amount of Rs40 billion was to come in through Eurobonds. Nothing done.

On the other side of the equation, Wapda/Pepco subsidy was estimated at Rs122 billion. The real figure is close to Rs360 billion. The federal government was expected to borrow Rs303 billion from the banking sector. The real figure has crossed Rs1 trillion.

Imagine; the federal government has already consumed “91 percent of the total annual budget in just nine months.” And now there’s going to be an election year budget-relief, subsidies, revenues would be widely overestimated, expenditures underestimated. A new disaster that is in the making.

Imagine; all that the government is doing is printing money – Rs1 trillion a year or Rs300 crore a day every day of the year. All that new money has caused food inflation to go through the roof and as a consequence 60 million rural Pakistanis and 22 million urban Pakistanis are now ‘food insecure’.

What is really scary is that no one is talking about the things that really matter. Politicians are promising to build bridges where there is no river and bureaucrats are not making any decision in order to escape all responsibility.

Our industry depends on energy and agriculture on water – amazingly, we have plans neither for energy nor for water. Muddling along the fast flowing Niagara River the wobbly ship with 180 million onboard is not too far from the falls, Niagara Falls.

The writer is a columnist based in Islamabad. Email: farrukh15@hotmail.com






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