IMF's go-ahead, but

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There is a period of respite for Pakistan for the next 28 months as a staff-level accord has been reached with the IMF. This entails a $1 billion tranche under the ongoing loan programme as well as $1.3 billion for climate resilience for the chronic borrower.

This staggering $2 billion or so have come after nail-biting discussions with the Fund and is now subject to the approval of the donor's Executive Board. But it seems a smooth sailing is set to be there as the recipient has left no stone unturned in agreeing to any of the harsh conditionalities set by the lender, and has satisfied it by making progress over macroeconomic stability.

To what extent it trickles down to literally strengthen the economy in the long run and address the grievances of the masses, burdened under soaring energy prices and direct taxation on their meagre incomes, is anybody's guess. A glance at the targets set for the beleaguered economy says it aims at fiscal consolidation, monetary policy to control inflation and reforms to improve Pakistan's energy sector.

In doing so, once again the IMF and the Pakistan government have not tapped the ultra-rich for taxation. The power producers, real-estate, agriculture and the likes are scot-free or with little liabilities towards the national exchequer. This is tantamount to staying afloat and not to reform the edifice of taxation, governance and revenue disbursement in the social strata, which inevitably leads to structural gaps and poor performance.

Pakistan's economy is in dire need of bolstering social protection, buoying allocations to health and education and assuring that the revenue generation is apt and logical. Taxing the rich is inevitable if Pakistan has to stop going to the Fund time and again for the sake of averting looming defaults.

It is a point of concern that even after availing 23 programmes with the IMF, the economy remains in the woods and essential meaningful reforms are still not in sight. The focus should turn on instantly reducing public debt, ensuring transparency and ushering in long-term sustainability.