FARANGI IN TOWN: Restricted by rates —Ella Rolfe


The Karachi stock exchange rallied a bit at the news of Musharraf’s resignation — the poor man had become that unpopular. But in terms of international confidence in Pakistan’s stability and financial virtue, this small toss of the head did not distract the beast that is Pakistan’s economy from its current gallop ravine-wards

A couple of weeks ago, I tried to send some money home, via Western Union. Well, I say tried — in fact it all worked out fine, as far as I know. Always a pleasant surprise in this country, especially where money is concerned.

But my purpose is not to moan about ‘this country’; it has, as I hope has become clear, been my aim to avoid that particular mindset. My bugbear in this case is the exchange rate.

At Western Union, I got a rate of Rs 146 to the pound, causing me to slightly underpay my recipient as I’d worked out how many rupees to send based on a different rate that I had found on XE.com the day before. Never mind. When describing my slight disgruntlement to a friend, however, it rapidly turned into indignation. The friend, flying to Lahore from London Heathrow a few weeks previously, had picked up her rupees at 123 to the pound — much the same rate as I got in London six months ago. Perhaps they haven’t heard about the political crisis in London yet?

This was, of course, a ‘bad rate’ for my friend, who was trying to get maximum rupees out of minimum pounds sterling; conversely, my rate was ‘bad’ for me in my attempt to expend minimum rupees on a bill levied in pounds.

The magic of currency exchange never fails to intrigue and confuse me. I am completely mystified as to why London Heathrow appears to be sticking to a comically out of date rate — perhaps to try to artificially force it down again by giving out fewer rupees? — but I know exactly why the Pak-side rate has evolved to what is now Asia’s most rampant inflation. Prices are up; investment is almost certainly down; the future is (as ever) uncertain.

Amazingly, the Karachi stock exchange rallied a bit at the news of Musharraf’s resignation — the poor man had become that unpopular. But in terms of international confidence in Pakistan’s stability and financial virtue, this small toss of the head did not distract the beast that is Pakistan’s economy from its current gallop ravine-wards.

Yes, I know there is a global recession in the offing; but Pakistan is still being valued at less and less in comparison to the rest of the housing-slump hit, redundancy-afflicted world. India’s currency, although it too has depreciated over the last few years, has remained fairly stable, at around Rs 80 to the pound, through the recent global economic upheaval.

All this puts me in mind of a talk given by the eminent Pakistani journalist Ahmed Rashid at the Carnegie Council in New York, at the beginning of June. Despite calling his new book about Pakistan Descent Into Chaos, Rashid said that he felt optimistic about the medium-term future for Pakistan. Democracy had been given a serious chance and had proven itself formidable, he said, adding that there are bound to be a few months of chaos following such a transition and such highly charged elections.

Well, that was three months ago — how many months does Rashid define as ‘a few’, I wonder? Because it looks like we’ve got several more to come. I’m not sure if a near-impeachment and resignation of the president and the collapse of a coalition count as ‘normal post-election chaos’ even in these circumstances.

It is possible that Nawaz Sharif’s departure from government (how was that decision made, by the way? Was there a vote or did Mr Sharif unilaterally decide the fate of his MPs? If someone could tell me this, I might find it an illuminating insight into the Pakistani political mind) will leave the remaining coalition members (yes, the ANP et al are still there — although in reality the PPP is surely in charge now) freer to get on with their agenda and will thus mitigate the current deadlock. However, Sharif may be planning to use his new opposition status to go for the jugular and cause as much trouble as possible for the PPP as it tries to get on with government. I am steadily getting into rant mode. Best to leave it there, I think.

It might just be an appropriate conclusion to say that while I am obviously a novice in the algebra of Pakistani politics, I give it four years. Come time for the next election, I suspect Mr Kayani may be having second thoughts about his non-intervention doctrine. And I didn’t just say that.

Meanwhile, I think I had better stay here until the rate gets better — it’s looking increasingly expensive for a Brit to leave. See you in four years, then, Mum.

Ella Rolfe is a freelance writer from London

Source: Daily Times, 1/9/2008

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