Uncomfortable truths

An editorial in this newspaper on 17^th June pointed out the way in which the national financial managers manipulated the numbers to present a picture more positive than was the reality. Now the International Monetary Fund (IMF) has picked up on the same inconsistencies and delivered something of a rebuke. Whilst the IMF acknowledges that there have been macroeconomic gains over the last four years, these are now at risk and are beginning to erode. The IMF has released a note which has a gloomier picture than the upbeat one presented by Finance Minister Ishaq Dar. Government debt has now risen to 66.6 per cent of GDP, not the 59.3 per cent figure currently quoted by the government to the National Assembly in the last week. This in itself may constitute lying to parliament — a grave offence. But then again there are lies, damned lies — and statistics. The IMF pegs the national debt at Rs21.2 trillion as against Mr Dar’s claim of Rs18.9 trillion.

The problems highlighted by the IMF are very much old news — circular debt, crippled state enterprises like Pakistan Steel and PIA, failure to formulate and implement tax reforms — which have been on the national agenda for in most cases decades. All of the problems are systemic and institutionalised, and all of them have escaped solution because they would have created inconvenient political difficulties for successive governments. The bottom line is that this is a failure of politics and politicians rather than deficient number-crunching by the financial gurus.

To a degree the IMF has contributed to the problem as it has adopted an ‘accommodative’ approach in its dealings with Pakistan — presumably because the consequences of doing otherwise in a state that has a certain instability are more than may be contemplated. It is time both for the state and the IMF to grasp any number of nettles if this corrosive circularity is ever to end. There are undeniable gains and improvements, life for millions is better, but they are fragile, vulnerable, and as the IMF is highlighting already being eaten away by political expediency rather than bolstered by political courage. We can, and must, do better than this.

Published in The Express Tribune, June 18^th, 2017.

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