Wobbly finances

During a review of the changes that have taken place in Pakistan’s economy over the past three years, the International Monetary Fund (IMF) stated on October 13 that the country’s foreign reserves have not yet reached comfortable levels. In 2013, Pakistan entered into a bailout programme funded by the IMF due to the dire state of our economy at that time and since then, the government has made several claims regarding marked improvements during the intervening period. The IMF has further stated that the rupee is overvalued in comparison to the dollar which could result in decreased trade competitiveness, a situation that is concerning as Pakistan’s export levels are already low. In addition, public-sector organisations such as the Pakistan Steel Mills, Railways and PIA are all making a loss as is the energy sector, however it must be noted that these losses have not been booked in the current budget.

According to the IMF, there are several positive steps that will help Pakistan’s economy for the better. Reforms in the energy and financial sectors were highlighted as was implementation of CPEC. However, future improvements in Pakistan’s economy are linked to key factors such as encouraging investments by creating a positive environment for businesses, improving transparency in utilisation of public funds and proper management of development projects. The importance of increasing tax collection by bringing a wider number of individuals into the tax net can also not be underestimated. It is quite clear thought that Pakistan’s economy is not out of the woods just yet. It will be a long, hard slog requiring the government to look further ahead than the next election cycle. It is hoped that our government’s desire to improve the economy goes beyond collecting plaudits and winning votes.

Published in The Express Tribune, October 17^th, 2016.

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