Pakistan is on the brink of negotiating its 15th bailout from the IMF. Like a déjà vu we have gotten used to, we are not outraged anymore. This time with a current account deficit of USD 15 billion, the economy is in shambles yet again. The adverse effects of this indicator reinforce the status quo of inequality within the country, especially when the burden falls upon the wider populace rather than the landed elite. With tax hikes in the technology sector - especially on laptops and cell phones - there is a detrimental effect on retailers importing technology on the cheap. For a developing country like Pakistan, the adverse impact on digitisation is disastrous for economic development.

How does social mobility diffuse in these highly globalised times if there are barriers to entry for Pakistan’s human capital? Exacerbating this, the devaluation of the Rupee has made the US dollar the highest stability point in Pakistan’s history: $1 for Rs142. The trickle down on consumer choice cannot be highlighted enough. For an economy whose unique selling point till now has been agriculture – how does the populace sustain a quality standard of living?

Let us look at this new canon of analysis through the saga with the IMF. Recent comments from Asad Umar give the outlook that the negotiations are about to end by March 26. But proudly, the Finance Minister states, “… we did not bow down to their demands.” For a country that has never experienced a high quality of life, what is the yardstick to compare this declaration against? It is easier to fuel the national pride of the people rather than concrete steps towards economic development. This is especially true when people have confidence and hope in the regime. The “ad-hoc management” of the economy is a policy measure that supports this outlook. Like a corporate expert struggling to stay afloat, Umar is playing the role of the CEO and has found success in the form of loans from Saudi Arabia and China through backdoor diplomacy. Granted, in an era when Pakistan is estranged from the United States, it is a remarkable achievement to garner a loan from the politically influenced IMF. But the question that begs to be asked is, how long can we continue an ad-hoc approach to macroeconomic management through seeking bailouts and stringent bilateral loans?

Already at its 15th iteration, IMF bailouts are carcinogenic for Pakistan as they are loans used to repay previous loans rather than furnish new ventures. Think of it as a Ponzi scheme in the international arena - taking more loans to pay off previous loans. This has been going on for a considerable time, and here we are again. One should not be blamed for having a higher expectation from the current government. Day to day administration has seen considerable improvement, especially in the accountability of safety nets in local government. Think of the PM’s local government compliant app. However, there are no signs of improvement in the international economic regime arena where we have yet to see the promised revolution from PTI’s end.

The revolution we need is one not to find creative ways to finance our debt trap through KSA or China. Instead, what we need is a novel approach to escape the debt trap altogether. And as suggestions go, structural adjustment programs (SAPs) seem the only way out in the long run for Pakistan’s economy.

SAPs have an imperial connotation: a taboo is surrounding them. This vilification is a result of the unequal set up of material relations in Pakistan. While SAPs focus on increasing the role of the free market and reduce government control altogether, they give a chance for new entrants in the private sector to reform the existing status quo. Why would the current influentials support such an affront to their privilege? Despite the public discourse and intelligentsia, they do work. They work because they reduce the monopolistic influence of the elites who vilify structural reform. Take India as an example of success. By 2018, it is the largest recipient of SAP loans. The focus has not been on a nationalistic agenda on investing in health and education. Rather, the largest recipients have been the banking sector of India. The idea is that the financial sector will diffuse prosperity in health and education through the positive externalities generated by their economic activity. The result is there is overall an overall move towards self-sufficiency, through an infrastructure for entrepreneurship and confidence, which inspires foreign direct investment within the Indian economy. These are long-term reforms which fundamentally generate activity in the economy and reduce dependency on the international arena. They are not means to perpetuate reliance on donors - whether they be China, Saudi Arabia, the United States or even the World Bank or the IMF.

However, it would be ignorant to replicate the Indian case in our scenario. We have our local demons to grapple with. Pakistan does not have a financial services sector that can sustain such an investment. But we do have the grounds to become an industrial economy, based on the availability of cheap labour. More so, we have coal reserves and a civil nuclear energy program. Perhaps the structural adjustment we need is to reform the power sector? After all, this is the most significant contributor to circular debt within the country. Such matters are better left under Finance Ministers or technocrats who have devoted their lives to such irking questions. However, the point remains: Pakistan needs to move from dependency to self-sufficiency, and it requires a revolution in macroeconomic management strategy.