A $10 billion ‘quick fix’

The assistance packages from allies will help see through a serious balance-of-payments crisis for Pakistan

Prime Minister Imran Khan is a relieved man. Well, that’s what he has himself said during a recent interaction with business reporters. Let’s take his words at face value. So what is it that has provided the PM the space to breathe easy? To quote the PM himself, the assistance packages from friendly countries — China, Saudi Arabia and the UAE — have helped Pakistan see through a serious balance-of-payments crisis concerning the ongoing fiscal year, and perhaps a couple of more to follow. Thus, the government can now afford to sit back and mull over the tough IMF conditions for a bailout package with a bargaining leverage at hand, instead of just entering into an agreement in a hurry to stich the fiscal hole in time, to burdensome consequences for the common man.

To the PM therefore, the economic uncertainty is over. And the situation allows him time to concentrate on how to bring the economy on track. While his team of ministers and bureaucrats is working on measures to introduce tax reforms for enhanced revenue generation, boost exports, revive sick units, bring back the looted wealth, etc in the government’s pursuit of economic well-being, the PM has decided to go ahead with a ‘quick-fix’ plan to secure a whopping $10 billion a year. Well before he had entered the PM House, Imran Khan had been claiming that an amount as big as $10 billion is laundered out of the country, and the amount, if saved, is alone enough to spare the government the embarrassment of extending the begging bowl each time it needs to make up for the deficit in its finances.

So, the PM has declared the launch of the ‘biggest-ever’ clampdown on money laundering in the country’s history. With the proposed drive against the illegal outflows, the PM attempts to kill two birds with one stone. On the one hand, the drive against money laundering seeks to prove the PM’s political narrative of a corrupt political class, rivalling him, wreaking havoc with the country’s economy for their vested interests, and on the other hand it aims at meeting a key FATF condition. However, no easy ride that. The PM must buckle up. 

Published in The Express Tribune, December 30^th, 2018.

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