THE new finance minister, Saleem Mandviwalla, has started his short, stopgap stint in office by helping the Economic Coordination Committee make certain controversial decisions as its chairman. The ECC is reported to have gone back, albeit partially, on three major decisions taken under the chairmanship of Mr Mandviwalla’s predecessor Hafeez Shaikh. This has spawned speculations that Mr Shaikh might have stepped down because of differences over policy matters with his cabinet colleagues and not simply because he wanted to lead the country into the next elections as caretaker prime minister. The picture will become clearer over the next several days as we approach the formation of a caretaker set-up.
The ECC has decided to upgrade by one notch the textile sector’s captive power plants on the priority list for gas supplies; allow the import of CNG kits and cylinders for which letters of credit have been opened or bank contracts, as per State Bank regulations, concluded before Dec 31, 2012; and grant transportation cost on every litre of petrol to be produced by Byco Refinery. While the decision to give priority in the supply of gas to the textile industry reflects a continuation of the government’s policy of facilitating the export-oriented industry and protecting jobs, the other two decisions indicate a reversal of earlier policies. The reimbursement of crude transportation costs to Byco, for example, amounts to doing away with the previous plan of deregulating oil freight margins. In the same way, the permission to import CNG kits and cylinders runs counter to the stated policy of discouraging use of subsidised gas by the transport sector in view of the fuel’s increasing shortage for power and industry. It almost seems as if some people in and outside government were waiting for Mr Shaikh to leave his job to get his decisions reversed. Or are decision-makers not in the habit of giving enough thought to an issue before framing policies? With the government nearing the end of its term, it would have been wiser to leave decisions about the reversal or formulation of policies to the next government.