The passing spectacle

ONE year ago, Pakistan scored a big victory in the May war against India and a round of applause went up around the country for the valiant efforts of our armed forces. Today, Pakistan is on the brink of securing a historic peace deal between the US and Iran. This is an impressive roster of victories on the geopolitical stage for a country that everyone was ready to write off only a few years ago. But as these successes roll in, it is worth our while to remember what a strong defence is all about. It is all about safeguarding people’s lives and livelihoods. With that in mind, when we look at the geopolitical successes and lower our gaze to see the foundation upon which they stand, it is impossible to escape the impression that much work remains to be done. The government has scored well on the diplomatic and defence front over the past one year. But these successes cannot mask its failure on the economic front. Let’s start with a few obvious observations. It has taken some doing to keep the oil supply chain going through these trying days. Timely price adjustments played a part in ensuring this continuity, due to which Pakistan has not seen the massive build-up of receivables in the oil supply chain or queues at pumps that snake on for more than a kilometre. But the unavoidable impact on prices is now cascading through the economy, and the State Bank has justifiably raised the discount rate, anticipating higher inflation in the months ahead. Let’s pause here to notice that the State Bank is finally behaving like a real central bank. It is not making nonsensical arguments like ‘this is supply-driven inflation and therefore does not require a monetary response’, like it did during the artificial growth spurt following the Covid years. Prudent and proactive monetary tightening is the right thing when the outlook shows heightened inflationary risk. The inability of the economy to supply and safeguard livelihoods is the real testing ground of this government. The second