The IMF bailout

The commitment shown by the government to have the IMF programme revived, even though it involved taking some harsh decisions to fulfil the requirement of the lending agency, is commendable indeed. It surely had political costs because the people were hard hit by the hydra-headed inflation due to the rollout of energy subsidies, higher fuel prices and the pressure on rupees. The PDM government did what the ground realities dictated, from which there was no escape and had to be taken to stem the rot in the economy. The PDM government deserves credit for its hard work to clinch the deal. It has certainly saved the country from a looming economic crisis. Though the IMF bailout is not big enough to fix all the maladies afflicting the economy, it will undoubtedly stabilise the economy by averting default on external obligations. It is indeed regrettable to note that the PTI government had laid landmines for the incoming government by burdening the economy with unfunded energy subsidies which constituted a breach of the agreement with the IMF. The political instability fomented by PTI after its exit from power hurt the market sentiment and created the perception of a heightened political risk which badly affected the flow of direct foreign investment in the country. The uncertainty thus created, led to slowing down progress in negotiations with the IMF which surely looked for political ownership. But the PDM government managed to keep its head above the water. It was quite evident that PTI was looking forward to scuttling the deal with the IMF to create difficulties for the government and undermine its ability to weather the storm. It did not rest at that and made a well-calculated effort at the last stages of the negotiations with the IMF to sabotage the conclusion of the bail-out package by the IMF. The revelations of the audio of conversation between former finance minister Shaukat Treen and finance ministers of KP and Punjab in which they are being asked to write letters to IMF conveying their inability to meet the commitments made with IMF is the ultimate act of jeopardising the national interest. Coming from a party which claims to be the largest political entity in the country, it is an inexcusable indiscretion. Political differences and enmities should not be taken to the extent of undermining national interests. The act is condemnable. I think the matter needs to be probed thoroughly if it is established that the party did indeed indulge in undermining the national interest, appropriate actions should be taken against it. The conclusion of the agreement for the release of the seventh and eighth tranches by the IMF has created a positive impact. There has been a surge in the value of the rupee creating a surge in the foreign exchange situation. There are signs of imported inflation relieving the headline inflation to a great extent. The deal is vitally needed to help Pakistan to rev up its economy rather than affording the luxury of an institutional patchwork of politics to bid for time. It is the beginning shot for the structural reforms. It is also the commencement of the count-down for repayment on the $34 billion the government for financing to support the IMF programme. Given the calamity created by floods, the government might feel justified in taking the relief and rehabilitation work of the tens and millions devastated by floods as its priority and bolstering the safety nets to safeguard vulnerable sections of society. But the priority should, nevertheless, be the revival of the economy. A balance will have to be created between the two compulsions. The country is wading through very difficult times both politically and economically. There can be no two opinions about that. It is time for all the political forces to join hands to winch the country out of the quagmire it is stuck into. Politics can wait for better times. I think PTI needs to recalibrate its political strategies and give preference to national interests rather than its narrow political agenda. The unfortunate reality is that PTI so far has not shown any inclination to abandon its self-serving agenda and its leader remains adamant as ever not to sit with the opposition to resolve the contentious political issues and devise a national economic outlook. He even continues to show disrespect for the state institutions including the judiciary. Through his loose cannon behaviour, he continues to heap scorn at the state institutions, insulting and threatening the people manning them. His threat to a lady judge has already landed him in trouble. The IHC served a notice of contempt of court on him. But on the first appearance in court, he has not shown any remorse for what he said against a judge. The court exercising restraint has given him yet another opportunity to rethink his response. He surely needs to rethink what he is trying to achieve through these undesirable and unconstitutional pursuits.

The writer is a freelance columnist. He can be reached at ashpak10@gmail.com.

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