All’s well that ends well. Even if logic dictates that securing foreign loans is hardly a national achievement for a country that routinely remains in the limelight over its inability to pay back debt, the government must be in a joyous mood after securing the approval of another bailout package, this time for a whopping $7 billion.
This comes after months of negotiations and discussions between Pakistani authorities and the IMF to provide much-needed financial support to help stabilise the country’s economy. Immediately after coming to power in Islamabad, PM Shahbaz Sharif made his priorities clear, “We cannot survive without yet another IMF program.” However, he and many in his cabinet also claim to have their work cut out as they aim for the 25th visit to the intensive care unit to do the charm.
Only time can tell about the “resolve” to ensure an exit from the IMF programme, but one thing is certain: mere rhetoric has neither achieved anything in the past nor would help Pakistan in the next three years. No matter what the spokespersons may believe, the bailout, despite being crucial in meeting the foreign financing needs, cannot singlehandedly resolve the current account deficit and ensure debt servicing payments are cut down to a manageable portion of the revenue. Those removed from reality are quick to argue: why not increase exports?
At the expense of popping their bubble, it is not as easy to generate foreign exchange earnings as television analysts portray. Because we import so much more than we are in a position to export from the scanty traditional sectors and there are little inflows from foreign investors, kneejerk solutions like import tariffs and subsidised energy inputs to industries have overwhelmingly fallen flat on their faces.
No qualms about the urgency of a well-defined, export-led industrial revolution! Pakistan would do well to tap into every exportable sector; encouraging local manufacturers by resolving their grievances and ensuring standards and quality to attract the international market.
Most importantly, Islamabad needs to snap out of its penchant for perceived stability (understandably, for the sake of electorate demands) and address crippling structural shortcomings. Is it possible for all of this to happen while the shadows of a seemingly never-ending political soap opera loom large? *