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Dawn Editorial 3 February 2020

Debt and revenues

TWO numbers released on Friday told the story of the straight and narrow path this government has to walk. The first was reported in the finance ministry’s debt policy statement submitted to parliament, which said the country’s overall debt had increased by 40pc in the previous fiscal year, rising by Rs11.6tr from June 2018 till September 2019. This is a massive increase and one is hard-pressed to find a precedent for such a steep rise. The second figure was released by the Federal Board of Revenue, which showed the overall revenue collection to have fallen short of its target by more than Rs100bn in the month of January, taking the overall shortfall in the tax collection target to Rs387bn. This shortfall now needs to be made up in the remaining five months of the fiscal year, or else the level of indebtedness will rise further. High debt contributes to the fiscal imbalance because it increases the cost of debt servicing, which is the single largest expenditure head in the government’s fiscal account. This necessitates further revenue measures. The vicious cycle can only be broken if revenues rise and debt levels fall, but for now it seems that we are moving in the opposite direction.
Nor do the figures show signs of abatement, despite the government’s claim that it has stabilised the economy by narrowing the key deficits that plagued it from 2016 onwards. In domestic debt, for example, the government accumulated an additional Rs4.3tr the last fiscal year, but in the period from July to September, it accumulated an additional Rs2tr. This shows an acceleration of the trend rather than its abatement, though in external debt accumulation the rising trend of the last fiscal year does seem to have stopped by September. From that month on, though, the foreign inflows into short-term government debt securities began their climb to reach $2.9bn by January 2020, so the next such report might show acceleration on the external side as well.
A closer look shows the government is concentrating on building up cash buffers, held as government deposits with the banking system, which show a sharp increase of Rs1.75tr, or more than 55pc, in the period from July to September. Aside from these, though, the fiscal indicators show no improvement in real terms, since revenue collection continues to register an increase of 16pc from the corresponding period the previous year, which is roughly equal to the inflation and GDP growth rate. In real terms, this is no increase, which leads to higher levels of debt accumulation. The time has come to end the spin. The economic situation may have stabilised in the sense that reserves and buffers have been built, but the situation remains perilous and the government continues to drift for lack of policy direction. The results are there in the numbers.


Asia Cup row

THE recent refusal of the Board of Control for Cricket in India to play this year’s Asia Cup in Pakistan has yet again exposed our neighbour’s questionable penchant for mixing politics and sports. The BCCI has only agreed to participate in the biennial event if the latter is moved to a neutral venue, otherwise it has threatened a boycott. India’s repeated refusal to tour Pakistan or even play the team at neutral venues has led to a virtual suspension of bilateral cricket ties since 2008. Hardly any event in world cricket generates as much excitement or viewership as a Pakistan-India match. While Pakistan has, time and again, expressed its willingness to tour India for scheduled matches and has successfully employed cricket diplomacy to break the ice with other cricket-playing countries, India’s absurd approach to sports has thwarted such attempts, thus depriving millions of fans of some very exciting contests.
The Asia Cup, in particular, has fallen prey to India’s obstinacy. It was as far back as 1993 that the Asia Cup had to be cancelled due to rising Pakistan-India tensions while the fate of several tournaments hung in the balance until such time that India managed to enforce its conditions for participation. In 2018, too, the Asian Cricket Council was forced to move the Asia Cup out of India because of the political tensions between the two arch-rivals, and it eventually had to be played in the UAE. The kind of clout that India has wielded in world cricket over the past decade or so is no secret. However, it is, indeed, a challenging task for India to alter things in its favour in mega events such as the World Cup that involves almost all the leading cricketing nations. So, India and the BCCI find it more convenient to browbeat the ACC, the main organiser of the Asia Cup. Wasim Khan, the Pakistan Cricket Board’s chief executive, has warned that if India does not agree to play the Asia Cup in Pakistan this year, the team may boycott next year’s T20 World Cup scheduled to take place in India. This response should be reconsidered as India’s unflattering example of mixing sports and politics needs to be shunned. Instead, the ACC — and the International Cricket Council where the larger picture is concerned — should show more spine and put pressure on India to stop putting politics in the way of a game of cricket.


Curbing hepatitis C

CONSIDERING that Pakistan has the second highest prevalence and disease burden of hepatitis C in the world, the Punjab government’s decision to reach out to WHO for help in curbing the illness is a much-needed move. Punjab accounts for up to 70pc of all hepatitis C cases in Pakistan and the provincial government has sought technical assistance from WHO to check and prevent what it believes could be a “possible explosion” of the disease. According to government estimates, there are between 8m and 11m people with active hepatitis C virus in Pakistan, while about 240,000 new cases are detected every year. The figures show that as many as 20m people may not be aware that they have contracted the virus. The high prevalence of infectious diseases in Pakistan, including HIV/AIDS and hepatitis C, can be largely attributed to unsafe medical practices and the lack of regulation. Last year, a major HIV outbreak occurred in Larkana district due to the extensive reuse of syringes. The use of contaminated needles and unsterilised equipment for invasive medical procedures, the transfusion of unscreened blood or other bodily fluids and the sharing of razors, a normal practice at barber shops, are among the major reasons for the high prevalence of hepatitis C in the country. In fact, according to WHO, Pakistan has the highest rate of therapeutic injections administered to patients, which is said to be the primary cause for the spread of the virus.
Ironically, Pakistan produces relatively cheaper medicines to treat the hepatitis C infection but since a large number of patients remain undiagnosed, few are able to get treated in time. The current government appears to realise the frightening magnitude of the disease burden. Hopefully, with WHO’s help, the prime minister’s programme for the prevention and control of hepatitis will be able to increase access for treatment even as it works to reduce unsafe medical practices. This will also help reduce the burden of other infectious diseases such as HIV/AIDS.


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