The easy-going with the IMF has apparently hit snags. The vocal concern expressed by the Washington-based lender citing incapacity of the ruling dispensation to overcome odds and go ahead with agreed reforms is worrisome. The Fund has clearly noted that “downside risks remain exceptionally high” and are marred with “high political uncertainty and resurgence of social tensions.” This is tantamount to an SOS to the government to do something out of the box, if it wants to see economic stabilisation. In other words, the prime donor, with which the lifeline of economy hangs, has stated that the homework is inward-oriented and politics cannot be differentiated from economics.
Some of the reservations are, however, on the mark. Pakistan for the last few weeks has once again slipped into a chaotic situation wherein political confrontation is at its peak, and the country has also seen the return of terror in restive areas. Likewise, the surge in sense of marginalisation has dipped the faith of local businesses who also keep their fingers crossed at the highhandedness of the IMF in slapping more taxes. The recent prescription of the Fund to further milk the salaried class and come down hard on small businesses and retailers has set in scepticism. Perhaps, this is why the lender sees a delay in implementation of reforms.
The Fund, nonetheless, had a few weeks ago appreciated the strong performance in achieving key goals as it doled out the last tranche of $1.1 billion. Thus, this somersault is bothersome and underscores the necessity to put the house in order. The postponement of Saudi Crown Prince Muhammad bin Salman’s visit to Islamabad had led to more speculation on the health of the economy, and its ability to come full circle as debt-servicing and budget formulation is round the corner. The desired diagnosis, however, is no rocket-science. All it entails is putting the heads together and striking a political consensus on the way ahead for the economy. Political alienation has already taken a huge toll, and it’s time to mend the fences and get going.
Published in The Express Tribune, May 13th, 2024.
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