Tough decisions

The most critical problem that the country is currently facing is the huge trade gap and the consequent large current account deficit which needs to be bridged quickly. Many were hoping that the newly elected government would focus on this issue. There was widespread expectation that the recently announced mini-budget would contain visible measures to curb the import bill by placing a complete ban on import of non-essential goods — this would have resulted in the savings of $8 to $9 billion per year. But it came as a surprise that this essential step wasn’t taken. This means that the government has decided to approach the external institutions for help. It has increased the duty on imports of certain items, the same approach adopted by the previous government which failed to deliver the result. Increase in duty is not going to curb the import of luxury/non-essential items consumed by the elite as they can afford to pay higher price. In hindsight, it seems that the government is reluctant to take tough decisions.

Arif Majeed

Karachi