The visit of the International Monetary Fund (IMF) Managing Director Christine Lagarde has come at a fortuitous time for the government of the Pakistan Muslim League (Nawaz) beset as it is on all sides domestically. The unhappy coincidence of the appalling terrorist raid on the police training school near Quetta has added to the portfolio of bad news in the government in-tray, and it is thus something of a comfort to hear warm words from the IMF – even if hedged about with some significant caveats. Pakistan has successfully completed a range of IMF supported economic reforms and begun to address a range of economic challenges as well as realise its potential, said Ms Lagarde, who additionally declared that the country’s economy ‘was out of danger.’
For a patient that in economic terms has been on life-support systems in the not far distant past this is good news indeed. Ms Lagarde was speaking at a press conference in Islambad standing beside Finance Minister Ishaq Dar on October 25. The IMF is all about the Big Picture, the macro optics, and it is indeed fair to say that there have been economic improvements in the last two years, but the gloss of the IMF approval rating hides some less comfortable news. Good as things may be they could be better, and taxation has had a specific mention as to an area where Pakistan continues to fall short – in fact 50 percent short in terms of what it could and should be counting into treasury coffers in terms of taxation.
Notwithstanding the caveats regarding the economy Ms Lagarde spared a few words for the ongoing Panama Papers imbroglio that is the source of much of the recent difficulty for the government. ‘It is a matter of transparency’ she said, thereby encapsulating that which has dogged this and virtually every other administration of many decades, transparency being an anathema to one and all. Ms Lagarde leaves Pakistan if not exactly with a rosy glow then not under a cloud either. We may need to knock on the IMF door again in the future, and the chances are we will be welcomed in rather than turned away.
Published in The Express Tribune, October 26th, 2016.
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