Better late than never. After weeks of dilly-dallying over whether to finalise a $7 billion bailout deal, we have finally heard from the International Monetary Fund as it confirmed a slot on the agenda of the executive board. An understandably relieved Finance Minister Muhammad Aurangzeb seems busy rolling out confirmations of having resolved all matters related to the agreement.
The prime minister echoed the same euphoria as he assured the cabinet of meeting necessary requirements before the deadline. Although he had plenty to learn from his predecessors, Mr Aurangzeb has a thankless job ahead of him, trying to juggle the Fund’s reservations, people’s expectations and a perpetually rating-starved media, of which he must have now had a good taste. His repeated words of assurance seemed to fall on deaf ears when controversy-peddlers used the delay as fodder for the self-perpetuating cycle of uncertainty.
Not that getting a loan approved should be celebrated by any economy, but the writing on the wall dictates that there’s no escaping it, and there’s no survival without it. Hopefully, this time around, the lawmakers would prefer to fulfil the conditions with sacrifices on their end instead of tightening the noose around the necks of existing lawmakers. With a two per cent reduction in interest rates, record remittances and positive developments in the current account indicating some stability in the economy, especially in the midst of unprecedented political turmoil, there is reason for cautious celebrations.
One may even be hopeful for a transition to a growing economy if the government shows enough wisdom to capitalise on the crashing oil market and take immediate steps to address issues like energy pricing and taxation reforms. While many of his colleagues responded to Mr Aurangzeb’s heroic declaration about this programme potentially being the last time Pakistan had to knock for a lifeline at the intensive care unit, Brazil, Ireland and most recently, Jamaica do offer valuable lessons in pulling out of debt crises and laying strong foundations for pro-market reforms. What we, in the meantime, need is political will to resist indulging in short-term measures! *