Pakistan is in rough waters while navigating with the IMF. The Fund’s clubbing of Islamabad with economies in dire straits, and that too recognised among war-torn countries, is not a good omen. It reflects on the poor health of the economy, which is mired with low growth, balance of payments ordeals and a neck-breaking inflation. While global credit agencies are already sceptical of investing in Pakistan, this new diatribe from the Washington-based lender will obviously lead to more impediments as the country is eager to seek another long-term bailout package. With the IMF pressing for more stringent reforms, it seems tougher days are ahead for the nation, and it squarely confirms the poor handling on the part of successive finance wizards.

With an economic growth forecast at little above 2%, the writing on the wall is abject unemployment and growing poverty. Also, inflation sits at around 40%, and energy prices keep their fingers crossed at the mercy of what is unfolding in the volatile Middle East. This means more uncertainty and a plummeting confidence of big investors. The sole exception at the moment is the renewed rubbing of shoulders with the Saudis and an optimistic roadmap of the SIFC. But these two potentials will also wait for a green signal from the Fund, and will keep continuity and political stability as benchmarks to get going. This pathetic equation underscores the need for taking a holistic review of Pakistan’s potentials as to recast them with a renewed vigour. Piling up more taxes on an already burdened salaried class while appeasing the big cats is a recipe for disaster.

While signing on the dotted line with the IMF, Pakistan this time around should not be carried away with a routine bailout. Rather, it’s time to double down on a strategy to strengthen the fundamentals of the economy such as agriculture, textile, tourism and SMEs. Saving the rupee from further depreciation and buoying exports are indispensable, apart from holding back national assets from being thrown under the bus in the name of privatisation. But the point is: is someone listening?

Published in The Express Tribune, April 21st, 2024.

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