LAHORE: The PPP-led government must be repenting the mistake of neglecting the economy for over four months as it has now reached a stage where even the harshest measures would not be enough to give it a kick-start.

What has surprised most economists is that the present regime has penalised the electorate by increasing petrol, gas and electricity rates without having any proper economic roadmap. The rise in prices of these utilities was essential as their cost has surged but the electorate expects an improvement in economy which would offset the impact of this additional burden coupled with high food prices.

During the past four months, foreign exchange reserves have dipped to the lowest level in four years. The rupee is on a free fall and the capital market’s performance reflects the apathy of regulators. It looks that the government has lost all financial controls. On the other side, banks are in the driving seat as they continue to offer marginal returns to depositors while charging over 16 per cent mark-up from borrowers. Hoarders of grains and vegetables are minting more money than they ever made in the past.

Even the decline in rupee’s value has not put a brake on imports which continue to grow at a higher pace than exports. It is true that the economic rot started much before the transfer of power to the present regime. However, what disturbs most economic analysts is that the downturn instead of slowing down has accelerated after the change of government.

Though the last speech by former president Musharraf was a bundle of lies but he had a point when he correctly stated that thermal power generation has gone down by 4,000 megawatts compared to what Water and Power Development Authority was generating during the same period last year. This is the main reason for the high loadshedding facing the country.

Many power generation experts point out that perhaps the government is deliberately keeping production low till another hike in electricity rates.

The trade and industry is worried as credentials of some of the ruling party members are dubious. Businessmen have doubts about the transparency of economic policies and PPP leaders would have to take up the challenge of bringing fairness and transparency in policies.

Economists point out that the economic scenario had drastically changed in the past decade. They say the globalisation process has reached all corners of the world and the slightest deviation from merit and transparency would have a devastating impact on the economies. Besides transparency, they suggest, the government would have to take prudent and quick decisions on economic policy.

An economist said postponing the decision on research and development support for textiles for instance had hurt exports. Similarly, the decision to apprehend hoarders, smugglers and tax under-filers could not be delayed any further as they were eating away the documented sector of the economy.