After our new government officially made contact with the World Bank, its Vice President for South Asia region, Hartwig Schafer said the bank was ready to support the reform plans of the new PTI government. Although certainly cannot be drawn from such initial meetings, Pakistan seems to be set to approach the international financial regime to find solutions for its debt crisis.

‘Reform plans are needed to stabilise the economy and accelerate growth to end poverty and boost prosperity,’ Schafer said at the end of his two-day official visit to Pakistan; which should leave no doubt in the government’s mind that approaching these bodies would entail a substantial rework of the country’s economic and financial policies. The strings will be attached; their length and breadth need to be negotiated.

However the demands of foreign financial organisations should not be the only reason Pakistan should look to reform its economy. Polices that call for investing in human capital and creating jobs, attracting investments through ease of doing business, and better regional connectivity are fundamental objectives that the government should be seeking to achieve, regardless of obligations.

Pakistan’s lack of Foreign Direct Investment (FDI) and the problems of uncompetitive exports are major reasons that contribute to the woes of businesses in Pakistan. It is in these two regions where a removal of impediments and red tape is required the most. Ease of business is a vital concern for foreign investments, and major challenges to that – such as a chronic energy shortage – make Pakistani products and services operate under severe duress.

Economists Abdul Razak Dawood and Ishrat Hussain as advisors to the Prime Minister, as well as the Finance Minister Asad Umar, should advise the cabinet to streamline economic policy and ensure that Pakistani enterprises can become competitive.