It is always easy to criticize, whereas the real test lies in also being able to propose alternatives, if not absolute solutions, and not merely indulge in faultfinding. The Pak economic managers have been insistent that given the financial mess they inherited, it is the macro stability that they initially seek, which when achieved will with time automatically go on to generate the desirous growth in the countrys economy. Further, they argue that in the absence of any real maturity or depth in the economy vis-a-vis revenue generation, to timely bridge the mega deficits (fiscal and trade) that were lobbed their way on the assumption of power, they have little choice but to go to the most stringent and perhaps the only willing financing institution - The IMF. Traditional 'ideological friends or others whose friendship is mythically considered to be 'higher than the mountains and deeper than the oceans have financial and recession related problems of their own and hence though sympathetic are just not coming forth with any tangibly transfusion of financial assistance. Also, the funds are required now and not later, that is in this critical phase where the Pakistani economy is in intensive care and what it critically needs is cash and not lofty visions - A respirator and not clever prescriptions Fair enough and point taken that with limited options in hand and an economic scenario fast approaching the default levels, we have no choice but to raise quick revenues from the IMF and in the process to also accept some tough cum punishing conditions. However, the issue is that if we accept the above argument in its totality then in essence what we are conceding is that either Pakistan no longer has an independent economic future and thereby doomed to be subservient to draconian financial institutions for as long as one can possibly look ahead or that the present managers simply do not possess the capacity to think beyond the near-term and the obvious. It is really the latter that one is mainly worried about, as with each passing day one feels more and more that to optimize our potential and secure our long-term financial future, we urgently need some visionary decision-making from our economic team and not merely accountancy prudence. Interestingly, the doubts about the blind belief of our leaders in Western rescue recipes get further strengthened by something unusual that happened to the international community in the third week of June, in that it came together for the first time at the UN to discuss the global financial crisis. The landmark consensus though may not have much practical impact on us at the moment, it however carries a strong recognition of a body of G-192 that yields a higher moral authority than the G-20 (rich mens club) and a recognition that the solution to bail out developing economies being advocated all this while by the G-20 is far from being ideal. According to the G-20 the only way forward for the developing economies lay through a well funded IMF (mainly funded by the G-20 itself), whereas, now according to the G-192 this strategy does not make such sense as it fails to take into account the risk of poor countries undertaking more debt and of course the very history of IMF in demanding borrowers to undertake counterproductive pro-cyclical policies. Ironically, this is precisely the dilemma Pakistan faces today - With foreign additional debt burden that by most estimates has already surpassed $50 billion and with over Rs.1600 billion of additional debt assumed in only the last eight years, the real question is that can we even afford to borrow more? So really, if on the one hand we admit that to keep afloat we have no choice but to resort to IMF, then on the other hand what visionary policies are we exactly advocating here? When closely analyzing the governmental policies over the last 18 months a number of measures come to mind that one feels could either have been done differently or should not have been altogether ignored by the policy makers. A glaring weakness that immediately comes to mind is the notion that perhaps the monetary tools have been over-emphasized as a strategy to tame inflation. That is, without going into the depth of assessing the underlying maturity of Pakistani markets in their capacity to effectively respond to interest rate adjustments. Meaning, the government probably has not properly accounted for the real drivers of inflation in the economy, which may not in realty be significantly curbed through high mark-up rates. Further, an accurate break-up analysis of demand is long overdue to be able to identify and separate the demand itself - private versus public, essential versus non-essential and short term versus long term. It is also important to not strangle the healthy demand and to take care because if simply one type of demand is replaced by the other (decrease in the private sector demand only to be replaced by the public sector demand) then the whole purpose of such an exercise gets defeated. Finally, given the peculiar nature of the demand in our market it needs to be determined in advance that will the subtle monetary tools be adequate to actually reduce market demand thereby reducing prices or what if the demand in the first place is inelastic. In this case the measure on the contrary gets to be counterproductive and actually further fans inflation. Then there is this whole question about whether or not the trade-off between increased unemployment due to reduced economic activity and inflation targeting even worth it? Also, then there is the need to ascertain the basic formulation of inflation itself: How much of it is internally driven and how much externally? How effective can we really be in fighting each type? Which areas can only be tamed through supply side measures and what portion of inflation as a percentage they constitute? Clearly no one has taken the pains to research these areas and surely studies need to be thoroughly conducted on these lines to be able to evolve an effective strategy in this regard. Also, this whole business of toying with recession and economic slowdowns tends to be a dangerous game There are countless examples across time (US, UK, Europe, Japan, etc.) that basically deliver a single important message that consciously allowing manufacturing and productivity to slow down can in the long run only lead to a quicksand of Depression from which it becomes very difficult to re-emerge and unemployment can soar to levels that lead to cruel poverty structures and deep social unrest. What we have witnessed recently is the financial sector for some reason (your guess is as good as mine) to thrive at the expense of industry. One does not need cash grants to support industry and mass employment generating initiatives but mainly a conducive environment and a mindset that allow entrepreneurs and entrepreneurship to flourish. It just takes a quick glance over last nine years actions in the framing of laws and regulations vis-a-vis businesses and between borrowers vs. lenders, spreads the banks in Pakistan have been provided with and governments elbowing out the private sector from access to institutional financing, to realize how negative we have been in our approach. While the world is busy revisiting the basics with developed and developing nations both now shifting focus back on to their core manufacturing strengths, we on the other hand seem to be hell bent on destroying ours, let alone facilitating them. If Pakistani economy is to be made sustainable then a vision needs to be quickly devised that makes it self-sustainable rather than every five years embarking on a borrowing splurge. Sadly, at different forums, I have heard government functionaries defend lavish administrative expenses by terming them as either necessary for larger good or by simply dismissing the criticism terming it to be irrelevant since the sum total in their opinion is too small in the overall context of the budget. However, what they fail to grasp is that governance, transparency, honesty, accountability, judiciousness and motivation is less to do with numbers and more to do with establishing a culture and a perception on governance that runs from top to bottom. May sound elementary condensed in a few lines, but the debits and credits of Pakistans economy can still be balanced provided we can focus on playing our strengths. The textile exports in good times nearly touched the $ 11-12 billion mark and the overall exports the $18 billion level. With prudent support this export figure in less than three years can be taken to $30 billion (20 in textiles where the capacity is already in place and the rest of exports put together at 10). Couple this with an effective overseas Pakistani ministry that can attract doable foreign remittance revenue of up to $10 billion (we are already in excess of 6) and in addition, a natural resultant inflow of DFI owing to enhanced exports, and the whole revenue side suddenly starts to look rather comfortable. Of course, the key is to first believe in ourselves and then to provide creative economic leadership rather than hand down demoralizing despotic decrees.