SO preoccupied are we with political, security, military and foreign policy matters these days that the leadership has almost forgotten that the real threat to survival is the fast-deteriorating economy.

Political uncertainty, unsettling internal security and rising tensions on the western borders do indeed pose a threat and should attract attention. Similarly, loadshedding, gas shortage and the rising cost of agricultural and industrial inputs are taking their toll on the economy and must be attended to. However, the more serious problem is that of macro-economic imbalances.

There is a wide imbalance between the potential and the actual growth rate, investment requirements and domestic savings, government expenditure and its revenue, imports and exports, current account receipts and payments, living standards of the people in the small and larger provinces, and the lifestyle of those residing in bungalows and that of the majority subsisting in surrounding urban ghettos and rural villages.

Unmindful of the dangerous consequences of the widening macroeconomic imbalances, both the government and the opposition are engaged in political gamesmanship and personal mudslinging in their bid to outwit each other to win the next elections.

Macroeconomic problems have been put on the back burner with neither the government nor the opposition giving any specific action plan to get the economy moving again on a path of high growth, relative price stability and balance-of-payment viability, with equitable distribution of the fruits of development across all provinces and all people.

There is no realisation that to preside over the country, the need is to ensure a flourishing, and not a sinking, economy.

Unfortunately, both the government and the opposition appear to rely chiefly on slogan-mongering and symbolic steps to hoodwink the public into believing that the economy is engaging their attention.

The advertisements of the Benazir Income Support Programme by the federal government, the launching of a new yellow cab scheme by the Punjab government and even lofty speeches to eradicate corruption by the newly emerging Pakistan Tehrik-i-Insaaf are not of any consequence without addressing the deep-rooted macroeconomic imbalances.

Economists hired by the government appear to be doing little to save the economy. But there seems to be an almost unanimous view of all non-government economists that macroeconomic indicators clearly show the economy is headed in the wrong direction. A low growth rate, rising inflation and potential external debt default are an explosive combination that should scare any economist of substance.

At present, the economy has been put on automatic pilot heading downwards.

In the domestic sector, the government, with the connivance of an indifferent State Bank of Pakistan (SBP), is borrowing from the banking system at an alarming rate to meet its expenditures — a large part of it must also be going into personal pockets.

In the external sector, it is relying on unpredictable foreign remittances and reserves to meet its foreign exchange requirements. This can only lead to economic disaster.

The government cannot run out of rupees so long as there is paper available to print them, and the SBP is led by those who show no sense of responsibility entrusted to them by the legislature. The process will ultimately stop itself when the rupee loses the people’s trust, and they move increasingly towards the ‘dollarisation’ of their economic dealings.

But the country will soon run out of dollars which neither the SBP nor the government can print. It will not only disrupt the foreign trade of the country but also lead to external debt default and additional domestic misery.

Such a situation is frightening. Cash foreign exchange will be the only payment acceptable for imports and that is what will be in short supply in the country. Unemployment, hunger and disease will increase and so will lawlessness. People may be on the streets and the governments may stand toppled but the economy will not head towards recovery without hard economic policy choices.

The phase of empty slogans will be over. Even if the country does survive the social and political turmoil, ordinary people will have to pay through their nose a heavy economic price for a long time to restore some semblance of normalcy.

There is not enough space to spell out the major components of a policy package that will be needed to address the problems.

However, it is essential to state the obvious. Government borrowing from the domestic banking system will need to stop and an export-led and domestic-saving based growth strategy must be worked out and put in place to change the direction of the economy. This is not possible without a national consensus on a long-term economic policy package.

The only sensible and patriotic move for the government and the opposition is to agree on an economic policy programme to be implemented by whichever government is, and will be, in power for years to come. Given the political history of the country it may be wishful and naive thinking, but a national consensus is what is required to rescue the sinking ship.

It is time that the political leadership and other stakeholders realised the gravity of the economic situation and got together to address the deeply troubling macroeconomic imbalances. Everything else, including the election campaign, should be subordinated to the task of saving the economy from freefall and collapse.

If the political leadership and other stakeholders do not act to save the economy, the people might be tempted to take matters into their own hands.

The writer is a former governor of the State Bank of Pakistan.