KARACHI:
The coalition government has lost considerable political support in the last few months due to a record increase in commodity prices. High inflation, low foreign exchange reserves, and business closures require the government to implement strategic reforms to appease the public and win back support.
If the government fails to take meaningful measures, the country will soon run out of remaining reserves and experience further economic turmoil. This will also prevent International Monetary Fund (IMF) and other donors from extending bailout packages. A few of the measures that can help provide relief to the masses and simultaneously help with economic recovery include widening the tax base instead of further burdening the already crushed salaried class. Real estate and agriculture sectors have long enjoyed hefty profits without contributing to the national exchequer. The government needs to act boldly to bring them under the tax net without caving into their blackmail. Many businesses operating in the informal economy enjoy hefty profits and must be brought under the tax net.
Export-oriented policies should be introduced to boost industrial production, which has significantly declined in the last few months. Import bans on raw materials and critical machinery have resulted in temporary and permanent business closures. Instead of spending heavily on short-term development schemes, the government should boost exports by relaxing import hurdles, providing subsidies to manufacturing sectors, and ensuring sustained fuel supply to keep the economy running. The time is ripe for all political parties to sit together and agree on comprehensive measures to address the economic challenges and restore public confidence.
Asad Aziz
Khushab
Published in The Express Tribune, June 11th, 2023.
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