Pakistan-Difficult Challenges Ahead

Notwithstanding that the politically elected President has replaced a military general, Pakistan is as yet not poised for a smooth sailing at least in the near future. The country has many fold problems to resolve - a clear security policy for its western borders, its relations with the US and western allies particularly in the so called fight against terrorists, its economic problems including trade, fiscal, inflation and development issues. These are too tall an order for the present political and economic managers. There seems no clear policy direction on any of these matters. Perhapes it was all unexpected for the Pakistan Peoples Party to have acquired so much power in too short a time and a total unpreparedness to handle the most intricate and problematic issues.

Iin the past couple of months, all macro-economic indicators are negative. Trade and current account deficits are showing increasing gap. Inflation has gone up by over 30% according to Government estimates. Stock market is showing declining trends. Foreign exchange reserves are not sufficiet even to meet a few months imports. Increasing oil and electricity prices are making manufacturing expensive and exports non-competitive in the international markets This is rather a gloomy picture and calls for very bold political and economic decisions, which I am afraid the present political and economic teams are hardly prepared to take