The Pakistani Rupee has been on a downward slope for almost 3 years now and needless to say that not only is this tangibly eroding connectivity of an average Pakistani with the outside world, it is also at the same time very punishing for the common man economically. Pakistan’s economic system—at least in theory—works on market principles, is compliant with WTO trading rules and regulations that call for an open economy for imports and is subject to a number of trade agreements that are predominantly politically driven, and therefore it comes as no surprise that imports are relatively inelastic and high as a percent of GDP, and that any devaluation of the Pak Rupee automatically correlates to higher inflation. The author has been consistently writing about inflation and market economies where time and again it has been pointed out that one of the main problems with the market economy system is that developing or poor countries have to be extra watchful on not only the extent, but also the content of product inflows they allow in. It is important to remember that while the goods are being sourced at global market rates, the cost will ultimately be borne by the consumer, who to be able to afford, needs to earn almost 170, 225 and 200 times the comparable American, British or the European, respectively! However, since the damage has been done now, to address the situation, the challenge lies in successfully managing the situation with some long-term vision, empathy and prudence; sadly elements currently lacking in our economic management. US defense chief says State Dept. failed to evacuate Americans sooner from Afghanistan. While surely agreed that pledged compliance with WTO and the international community become a constraint in independent policymaking, but then China and India have consistently managed these aspects whenever they have felt the need to do so. And even for the champions of the so-called laissez-faire, the Americans, only recently we saw Trump literally bin almost all regulations on free trade and climate change when it suited them! In hindsight, now when we see the purpose of Darnomics where the then Finance Minister was fixated with resisting devaluation, perhaps he stands somewhat vindicated in many ways. Only if he had shown the same resilience in controlling unnecessary imports, promoting productivity and undertaking domestic-growth oriented policies to check deindustrialisation, things would have been significantly different today.
