LAHORE: The economic cost of the death of Benazir Bhutto would bring about difficulties for the government to meet its growth, revenue and export targets which were already under pressure due to government’s reluctance to take hard economic decisions in the election year.
The country has lost billions of rupees in revenues and exports besides colossal loss to property and life in two days of strike and riots after the death of former prime minister Benazir Bhutto.
All economic activities have suddenly stopped. Not only normal trading activities have halted but also the public transport is completely off the roads.
The industries have been closed. Angry protestors have destroyed valuable infrastructure. Banks have been looted and set on fire. The trains have been burnt and scores of Railway Stations have been demolished. The initial estimates of loss to public property are around Rs10 billion out of which Pakistan Railways alone has suffered a loss of Rs3.5 billion.
Experts estimate the revenue loss for Rs7 billion during the two days. This appertains to the loss suffered as per revenue targets.
The loss would be much higher as private sector would book losses for the vehicles burnt and property and stocks lost during the agitation. This would put further pressure on revenue collection. The government is already spending Rs13 billion averagely per month for providing protection to the consumers on petroleum rates. The budget deficit has already ballooned to unmanageable limits. The current pressure could trigger inflation beyond the control of economic managers.
The government is unlikely to risk its acceptability further by increasing petroleum rates so soon after the demise of the PPP’s chairperson.
Experts pointed out that CBR (now FBR) had been able to overshoot the tax revenue targets for last four years due to uninterrupted industrial and trading activities.
They said during the last five years neither the industry nor the trade observed any strike or closure even for one day. They said it is for the first time after five years that every economic activity in the country halted for the two days. They said past riots, rallies, protest-march and terrorist activities failed to stop production or trade activities. They said the present disruption has come at a time when revenue generation was already under pressure.
The exports had remained below targets for the last two years and were likely to remain so this fiscal. The imports on the other hand had shot much above the government estimates that have increased the trade deficit.
Most of the developed countries had already advised their citizens to avoid traveling to Pakistan after the killing of Benazir. This would further put pressure on exports. Many garment and knitwear exporters informed The News that they have received queries from their buyers on their ability to timely execute the orders already placed with them.
The exporters apprehend that the new orders would be fewer as the buyers would shift to risk free countries. They said per unit rates of Pakistani products that are already very low would also come under pressure. Economic experts think that it would require some time and effort to restore the confidence of the foreign buyers.