The charade continues

Were it not for the dire consequences, we would admire the finance ministry bureaucrats for their tenacity and creativity. They have made global beggary into an art form. But what does make us curious is why the supposedly sophisticated International Monetary Fund (IMF) is going along with the charade. The revelation that the IMF has all but given in to Islamabad’s request for $7.2 billion — by acquiescing to a $6.6 billion bailout — suggests that the finance ministry’s shoddy arithmetic and lack of long-term planning have somehow convinced the world’s lender of the last resort to keep on sinking more money into the black hole of Pakistan’s federal budget deficit.

A bigger bailout simply means that the government’s finances in the short term will stabilise, and the run on the rupee, which has caused a significant depreciation in its value, will likely stop. The higher number is good news this year. But it may simply portend disaster in the coming years. The world is growing tired of Pakistan’s increasing inability to govern itself. On matters like terrorism, there is at least the excuse that the problem of radicalisation and extremism is a complex one that requires a multi-decade approach. That excuse, however, holds no validity when it comes to our government’s utter failure at paying its own bills. At some point, the global community will decide that it is sick of picking up the tab for Pakistan’s feckless, free-loading elite. At that point, expect an economic collapse.

Pakistan’s economy should be one of the most vibrant and dynamic in the world. It has a young, growing population that is growing — at least in some parts — increasingly affluent. Yet, instead of being seen as a prime target of investment, our economy is viewed as a house of cards, purely because the government continues to rely on foreign and local borrowing and refuses to crack down on tax evasion. Until we do so, we should not expect to be treated with respect around the world.

Published in The Express Tribune, August 19^th, 2013.

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