Business | Economy
Pakistan PM's adviser faces uphill task
Tarin takes over at a time when stock market has plummeted and there is economic turmoil.
- By Farhan BokhariSpecial to Gulf News
- Published: 23:29 October 11, 2008
Shaukat Tarin's appointment as the main adviser to Pakistan's prime minister has helped lift hope in a country which is facing economical turmoil.
Tarin, a savvy banker who heads Pakistan's finance ministry, brings a long track record of successes. In Tarin, Pakistan's equity investors, who have lost much on the Karachi Stock Exchange (KSE), have a top finance manager who understands their plight.
His appointment is at a time when share prices have plummeted, driven down by anxiety over the political outlook.
But of more immediate concern for investors is how Pakistan's economy evolves in the coming months. For now, the situation remains complicated by a worsening balance of payments situation. Pakistan's liquid foreign currency reserves are about $8 billion (Dh29 billion). This includes about $4.5 billion held by the central bank, also called the State Bank of Pakistan.
Reports say there are about $3 billion worth of debt-related payments coming up. Pakistan must also cope with a significantly high import bill.
Resurrecting Pakistan's economy is far from easy. Pakistan's stock market managers will have to accept that stock markets must be allowed to find their natural base level. This logic appears to have been ignored when the KSE's management in Aug-ust proposed an artificial floor for share prices.
- The writer is a journalist based in Pakistan
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