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How will 2022 be?

Dr Shujaat Mubarik

The writer is Professor and Associate Dean at Institute of Business Management (IoBM) Karachi.

Some habits last a lifetime. I have a habit of waking up early in the morning. Whether it’s the week, a public holiday, or going to the office, I’m used to getting up early when my family is fast asleep and wandering around my house alone.

Last Sunday too, I woke up early as usual in the morning basking in the sunlight coming from the drawing room’s window when I wondered what will year 2022 will be like for Pakistan. As a student of economics, the first thing that comes to our mind is the economic future, which is why my thoughts drifted towards the economy of Pakistan.

Will the rising inflation stop or spiral out of control? When I thought about the global oil prices and freight rates, I was displeased as the factors did not seem to be in our favour. I wondered whether domestic policies (which if strong can withstand these external factors) might be able to stem the tide of rising prices.

It occurred to me that raising interest rates would increase inflation, and anyway and our monetary and fiscal policies do not seem to be rather effective.  I thought for a moment and wondered. Will there be any benefit if the monetary policy is reviewed?

This would be unlikely given the abolishment of subsidies worth Rs350 billion and the petroleum levy of Rs4 litre. Then we have the imposition of duties (including solar panels and other equipment) in the ‘mini-budget’. Maybe we cannot control inflation but can we stop its pace.

If you think about it, the country’s exports may be able to stabilise the economy and if inflation is not lowered, our income can be corrected in case of overproduction. However, the government is only focused on the textile industry and does not consider any other sector worthy of attention.

We can increase our IT exports to $4 billion (remember our neighbouring country’s IT exports are $50 billion) but no attention is paid. The same is true for seafood exports which has the potential to reach $3 billion. Also, the business costs are making our products competitive. With these conditions in mind, the idea of improving the economy through exports has to be rejected immediately.

It seems that 2022 will not be able to resolve our problems.

Then, I thought the government would take action against the mafias and the sugar, flour, cement and steel cartels by activating the Competition Commission. This may control prices but these groups have become so strong in the last few years that any voices against them have dissipated.

It thought that maybe the smuggling of livestock, urea and other commodities to Afghanistan can be stopped to prevent artificial shortages. Then I saw the leaders of all these activities holding high positions of power and my dream suddenly crashed.

I opened my eyes and once again wondered if the recommendations of the institutional reforms committee chaired by Dr Ishrat Hussain for three years could change the course of the economy or if Asad Omar’s economic theory could stop the ups and downs, but there was no answer.

After considering all these factors, a fear arose that perhaps the failed monetary policy, fiscal policy, outdated reform system, economic blocs, rising smuggling, tough external factors, rising oil prices and depreciating rupee will not bode well for the ongoing year.

Rather than eradicating poverty, year 2022 will eliminate the poor. I hope my apprehensions, thoughts, and analysis be proved wrong but I am not very optimistic. It seems that 2022 will not be able to resolve our problems. We always end up receiving more than we hope for and don’t even realize what lies ahead for us.

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