Pakistan caught amid market and political turmoil

Islamabad: The steep fall in Pakistani share prices on Friday (just below five per cent) has led to fresh concerns over the future of the Karachi Stock Exchange (KSE).

The fall came as a result of the decision by the central bank, the State Bank of Pakistan, to raise its key discount rate to 12 per cent, up from 10.5 per cent, in a bid to tighten money supply and curb inflation.

In recent weeks, concerns have mounted over Pakistan's widening fiscal and current account deficits while the country's economy has been surrounded with warnings of an unprecedented slow down.

Like many other oil-importing developing countries, Pakistan's future outlook has been troubled in view of soaring oil prices. The unprecedented rise in the price of key commodities worldwide has added to the difficulty.

Given this difficult economic situation, Pakistan's outlook can at least be helped in the short term if its leaders rally around the single cause of securing the country's future. Instead, the newly-elected government has found its leaders practically squandering what could otherwise be a brilliant opportunity to take the country forward.

On Friday as the stock market sunk, the political debate took a new twist when Asif Ali Zardari, co-chairman of the Pakistan People's Party (PPP) publicly called President Pervez Musharraf "a relic of the past". Zardari's remarks hardly set the course for political consolidation just when that is badly needed.

His remarks were followed by a decision by Pakistan Muslim League - Nawaz (PML-N) leader Nawaz Sharif to withdraw all of his ministers from the federal cabinet.

Settling the markets must be done with a view to settling down political turmoil and adopting policies which would help to revive sectors that are presently in disarray.

- The writer is a journalist based in Pakistan