The government has met the news of the current account recording a deficit of $662 million in December with a deafening silence, even though the cumulative current account for the first half of the current fiscal year remains in a surplus of $1.1 billion, which indicates a willingness to take credit for good news, but not for bad. The attack of dumbness contrasts with the loquacity of recent months when current account surpluses were being recorded, and for which the government boasted without shame. Perhaps one reason for the deficit has been the government itself, as one of the main reasons for the deficit has been an increased import bill because of food imports, with wheat and sugar being imported in unprecedented quantities after shortages had raised a storm of protest, especially when the prices of these commodities went up and up, with no end in sight. That these shortages had been caused by the government’s own decision to export both commodities still awaits full investigation, with a senior PTI figure, and one of Prime Minister Imran Khan’s closest confidants being implicated.
Foreign workers’ remittances have also increased substantially, but this may prove a temporary phenomenon, as further depression of the Gulf economies might lead to a decline in remittances. The government has also been patting itself on the back over this increase, though it has done little or nothing to generate this. The government might do well to consider that an easing of the foreign exchange situation has led to a jump in imports. The pity is that these imports have been because of its own mistakes rather than because of any improvement in the standard of living of the average citizen, or because of any sudden increase in the price of any of Pakistan’s major imports.
One clue to the surplus, even all other indicators remain in the red, could be the increase in foreign commercial borrowing, with December seeing the government borrowing at $1.2 billion, taking the total for the year so far to $5.7 billion. Little of this money went to productive use, most of it being voted to repaying already contracted debt. So long as the government keeps on hounding its political opponents, and refuse to reform the taxation system, recoveries will remain as chimerical as this.
