It’s difficult to make out just why Finance Minster Miftah Ismail’s decision to raise petrol prices the other day, just when Brent had dropped for the week in the international market, caused such a rift within the PML-N. If the party supremo and his daughter, the vice president and also its charismatic face, didn’t want Miftah to go ahead with the rise, and he did it anyway, it goes to show an enviable level of independence for the finance ministry, which, under ordinary circumstances, ought to be appreciated.
Let us not forget that rallying around a consensus, despite differences, is the very essence of democracy. Therefore, if Nawaz and Maryam aired their dislike in public to gain some measure of sympathy, it is not very likely to work either because people’s sentiments will be driven by their experiences at the pump, not how they feel after reading Maryam’s protesting tweets.
The fact is that Miftah’s hands are tied. And, under the circumstances, he’s done a pretty good job of reviving the IMF bailout program, for which he has had to operate like a cold-hearted surgeon, knowing full well that structural adjustment requires painful and protracted austerity. But that is only one part of the picture.
For the reforms to truly turn the economy, the finance ministry would have to incentivize manufacturing and production in a way that improves export revenue and relieves pressure on the current account. Otherwise, all this sacrifice would be for nothing and we will remain caught in the borrow-to-survive cycle.
It was, after all, because of the Sharif family’s intervention that the ministry had to roll back the fixed tax on traders, which cost the kitty something in excess of Rs30b for the year. Now, for very obvious reasons, the ministry has to do very painful financial acrobatics to balance its books in a way that doesn’t upset the Fund. And the axe, as always, will fall on the common man, no matter how much of a fuss anybody at Jati Umra makes about it. The days when Ishaq Dar’s antics could be allowed to fiddle with the market are long gone. And the last thing PML-N wants is for Miftah to throw his hands up in despair and call it a day.
