Zardari's fiscal ability questioned

We thought that foreign policy was Asif's achilles heel but now we have a dwindling fiscal policy too.

Two recent decisions by Mr. Zardari showed a disregard for Pakistan’s alarming deficits, they said, speaking anonymously because they did not want to publicly criticize the next president.

In April, Mr. Zardari told Ishaq Dar, the finance minister at the time and a member of Mr. Sharif’s party, which has since broken with Mr. Zardari, that he wanted the price the government paid farmers for wheat to be raised substantially as a way of rewarding an important constituency in Punjab Province, the nation’s most populous, according to two participants in the discussion with Mr. Zardari. The government would then have to heavily subsidize the cost of wheat to the consumer.

When Mr. Dar asked Mr. Zardari how he thought the government would pay for the subsidy, Mr. Zardari replied, “Print the notes,” according to the two participants, a government official and an associate of Mr. Zardari’s. In an effort to solve the impasse over the subsidy, it was suggested that Mr. Zardari form a committee of experts.

“ ‘I am the expert,’ ” Mr. Zardari said, according to his associate.

Farahnaz Ispahani, a spokeswoman for Mr. Zardari’s party, denied the account.

The two officials described another episode in May as the budget was being prepared. Mr. Zardari decided to scrap a proposed capital gains tax after a visit from a group of influential stockbrokers from the Karachi stock exchange, they said. The revenue from the capital gains tax, and from an income tax proposal on the rich, would have paid for an income support program for the poorest Pakistanis, they said. More than half of Pakistanis live on less than $2 a day, according to the World Bank.