Our Prime Minister, Syed Yousuf Raza Gilani, is not a man given to deep thoughts on serious economic issues. He is completely at sea if financial or economic implications emerge from what appear to him to be simple administrative matters. Voters, in Punjab, could not be allowed to cause damage to public property and raise offensive slogans against the Co-Chairman of the party. To end demonstrations against loadshedding that were fast spreading to Khyber Pakhtunkhwa (KP), the PM called for an old summary lying in the office of the Minister for Water and Power and its recommendations were got approved by the Cabinet. This included two weekly holidays, closure of markets at sunset, and other measures to conserve power. The objections of Punjab and KP were ignored. The loss to the GDP on account of shutdown of industry and business was not a matter of concern for the PM or his Cabinet. Some of his newly inducted Cabinet colleagues were, however, deeply concerned with the non-release of funds for their constituencies. Overwhelmed by grief and the realisation that sacrifices made by Begum Nusrat Bhutto ought to be acknowledged by the nation, the PM abruptly ordered a nationwide shutdown of work. It is conservatively estimated that the country lost an output of more than Rs30 billion, due to the unexpected national holiday announced by him. According to the PMs thinking record, this was an administrative decision that would please both the party workers and the high command. Economics had nothing to do with it. It did not matter if other countries in the rest of the world rich or poor were not making such proclamations. There was a feeling of relief when a few weeks back it was announced that Pakistan will not seek a new IMF loan programme or ask for an extension when its existing loan package ends on September 30. Pakistan currently has no balance of payments crisis and has enough foreign exchange reserves. This situation is likely to change adversely, if the countrys leadership continues to demonstrate its complete ignorance of adverse economic implications contained in their decisions such as two weekly holidays or a day of national mourning. Pakistan has been struggling since 2008 to keep its economy afloat with an $11 billion IMF loan. Around $3 billion remained undisbursed when Islamabad found it onerous to implement the outstanding conditionalities. The standby loan agreement stood fractured and abandoned. The IMF on its part has repeatedly urged Pakistan to speed up fiscal reforms. The Finance Ministry officials maintain that despite no longer seeking the IMF support, the government would "continue to implement the fiscal reforms required for macroeconomic stability in the medium term." Pakistan's current account deficit in the first two months of 2011-12 fiscal year narrowed to $189 million, compared with a deficit of $1.016 billion in the same period last year, due to an increase in exports and a rise in remittances from Pakistanis working abroad. Pakistan's foreign exchange reserves stood at $17.79 billion in the week ending September 10 and had hit a record $18.31 billion in the week ending July 10, but have eased due to scheduled debt payments. The IMF loan repayments are also due to start from early next year. At the time that Pakistan walked away from the IMF, experts had said that the country will eventually need to turn to it for another loan programme. Ultimately, the balance of payments pressure will build up and we can, perhaps, stretch being without a programme for a few more months. But with the repayments and lack of funding from multilaterals, it will become increasingly difficult to be without an IMF programme. Acceleration in our dependence on the IMF may occur if the government continues with its fiscal indiscipline, fails to end corruption, finds no solution to the power crisis or the law and order situation, and fails to enlarge the taxbase. The outlook for FY 2011-12 does not look promising because of a variety of factors. First and foremost is the plight of cotton where the commodity's prices have already softened. Rice and sugarcane has also been affected. This has led the country's economic managers to revise the GDP growth target for the current fiscal year from 4.2 to 3.5 percent, as the floods in Sindh have caused a loss of 2.5 million cotton bales. Moreover, world oil prices are likely to soar during the current fiscal year, badly impacting the country's trade balance. Since cotton plays a major role in exports, the export target for FY 2011-12 will not be achievable, thereby adding pressure on the current account. This will also worsen the fiscal deficit. An IMF delegation would be arriving shortly to hold Article IV consultations with government officials on economic and development policies. The delegation will stay in Pakistan for about 10 days. It is believed that it would be given an assurance that dialogue with the IMF was an ongoing process. The impression that government was revisiting its relationship with the Fund would be dispelled. One can only hope that the PM will cease to lend support to party issues where national economic interests are involved. If we have to stay away from the IMF, the President should ask the PM to ensure passage of additional tax proposals through Parliament now that the government has an absolute majority in both the National Assembly and the Senate. The writer is a retired secretary of the Government of Pakistan. Email: shakeelahmad941@hotmail.com