Just as the nation thought the pain associated with getting an IMF package was over, comes the news from the State Bank that the government will pay it $680 million in September, after having paid it $390 million this month. It is to relieve the pressure that the country faces on the foreign exchange reserves that it has obtained a fresh package from the IMF. Federal Finance Minister Ishaq Dar announced at a press conference in Islamabad on Monday that the economy was on the way up.

Though there were two positive indications, he mentioned, it might be premature to declare a revival. It may well be true, as he said, that Pakistan had managed to obtain the wherewithal to meet its financial commitments in the current fiscal year, and also that it had met the tax collection target for the first month of the current fiscal, but these are basic, and nothing to celebrate about. After all, it is an assumption that a country will repay its loans, and it cannot be taken as a sign of revival if it can only repay past loans by taking out new ones. It must be a moment to pause and reflect, rather than celebrate, that the new package was only approved because Pakistan first met the IMF conditionalities. Similarly, tax collection is supposed to meet the target. If it does not, perhaps the target was not properly set.

Not agreeing to a devaluation is not as great an achievement as Senator Dar seemed to assume it is, because the open-market flotation of a currency means that it is not possible to prevent its devaluation, if that is what the market dictates. As the devaluation demand came just after the rupee had fallen to new lows, it was not particularly hard to fend it off.

The government must concentrate on the two main problems facing the economy, energy shortages and the consequent loadshedding, and the law and order situation which compounds it. There is hope for the revival of the economy, but it depends on these factors, and such measures as Senator Dar announced only serve to make sure the economy survives until there is a real upturn. That will be apparent in the real economy, as well as in the attraction provided by the Pakistan to investment, both foreign and local. Investment is only made when the investor is certain not just of recovery of his investment, but also of a healthy return. No one can talk an investor into parting with his money. Senator Dar and his colleagues must remember this. At present, they must focus not just on reducing the pain the IMF is inflicting, but also on ensuring that the country never goes through it again.