By Sardar Khan Niazi
The resumption of the IMF program is crucial for Pakistan, which is facing a balance of payment crisis. The heightened domestic political uncertainty leads to a great deal of economic uncertainty. On the international front, the western world is also experiencing high inflation.
The situation has been affecting the lowest segment of the population a great deal. Whenever enhanced prices upset the poor citizens, they blame the ruling political party for the miseries.
The parties in opposition squash the maximum benefit out of this situation and put relative figures of oil, utilities, wheat, and milk in front of the common people, and party spokespersons put the blame on the government by pointing out widespread corruption, incompetence, and mismanagement.
In response, the parties in the government try to put the blame on the acts of omission and commission of the previous government. In addition, their spokespersons advise the masses to wait for good days. This is the manner political parties shape and spread their descriptions by using print and electronic media. However, thorny issues remain unsettled.
Basic problems remain unresolved because of the volatile domestic political situation and international economic environment. All these factors enhance economic uncertainty.
According to Finance Minister Senator Mohammad Ishaq Dar, a staff-level agreement with the International Monetary Fund (IMF) is possible in the next few days. He added by saying that it has taken longer than it should have in my opinion, however, we seem to be very close to signing the agreement.
The announcement from Dar comes as Pakistan remains engaged with the IMF for a bailout program. The IMF mission left Islamabad without inking the staff-level agreement, and instead, issued a short four-paragraph statement stressing on timely completion of prior conditions to revive the stalled bailout program.
He blamed the previous government for reversing the conditionalities of the IMF that led to a serious trust deficit between developing partners and Pakistan as a country. “We are striving hard to revive the economy. Frankly speaking, before I took over the office, from a distance I did not know how deep a quagmire we, as a country, were in,” he remarked.
He said the economic mismanagement in the last few years has completely reversed the progress that the country had achieved during 2013-18. It pains me to share that we are ranked the 47th global economy in the year 2022; it is something for all of us to reflect on.
He said the Foreign Direct Investment (FDI) at present stands at a historic low, blaming poor governance and economic mismanagement in the last few years. Pakistan Stock Exchange (PSX) market capitalization has dropped to $26 billion; a loss of $70.74 billion. Moreover, the debt stock has almost doubled creating concerns regarding debt sustainability.
Criticizing the opposition, Dar dismissed the country’s default rumors, terming them as ill-founded. The persistent spread of fake propaganda about Pakistan defaulting on its international financial obligation is completely malafide, which harms the country’s economy.
High economic uncertainty adds fuel to the fire and aggravates the situation. The emerging situation requires good leadership. Let us see how the current political dispensation navigates the crisis in the coming months.
Dar lauded the role of developing partners including the Asian Development Bank (ADB) and World Bank in their support of Pakistan’s economy.
He also said that given the challenges presented by the current economic situation, the upcoming budget “will be a step in taking the country out of the economic quagmire the current government has inherited.”
Political parties often find themselves at odds with each other over policy decisions; it will be to the benefit of the country if they develop a consensus on national issues.