QUETTA:
Yet again, a new government — this time PML-N — inherited a mismanaged economy and was consequently left with no choice but to seek IMF assistance to save the economy. This has been the same traditional dilemma that every successive government confront when they come to power — inheriting low forex reserves for financing huge external debt, fiscal and current account deficits, and imbalance in the overall BOP.
However, Finance Minister Miftah Ismail now claims that a breathing space has been secured, which will help avert the external default risk temporarily, unlock more loans from bilateral and multilateral donors, and save the government from an overall economic crisis in the short-run. The only immediate solution, if any exists, is the implementation of harsh conditionalities of IMF, irrespective of their likely adverse impacts on society. The only way out from the perpetual debt trap is to carry out fundamental structural reforms to fix the underlying problems in the economic structure of Pakistan.
Published in The Express Tribune, July 25th, 2022.
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