Daily Times

The question of the IMF bailout package remains seemingly unresolved; despite the Centre having formally approached the Fund earlier this month towards this end.

Last week alone saw the new PTI government deliver conflicting messages. From Prime Minister Imran Khan insisting that the country may not ultimately seek economic relief from the global lending institute; but rather depend on the largesse of friendly nations. To Asad Umar, the Finance minister, just two days later, promising stockbrokers in Karachi that this bailout will be Pakistan’s last.

This is not a case of pussyfooting around so much as hedging national bets. And it is not good enough. Especially considering that the recently visiting FATF team has just given the country a less than clean bill of health when it comes to complying with international norms on money-laundering and terror financing. Indeed, the delegation reportedly informed Mr Umar that interactions with relevant agencies — including the Federal Investigation Agency (FIA), National Counter Terrorism Authority (NACTA) and National Accountability Bureau (NAB) — were less than forthcoming. The upshot being that Pakistan has until next March-April, when the Task Force is scheduled to conduct its next on-site review, to demonstrate robust progress. And then come September the country will have to prove compliance with the 10-point action plan that it committed to this summer. Failure on any of these fronts will essentially fast-track blacklisting. Thereby not only severely impacting Islamabad’s borrowing ability vis-à-vis established multilateral frameworks but also rendering the country a liability for traditional allies.

It is about time that Team Khan grasped all this. The PM may have been right in pointing out (as recently as yesterday) that the sticking point in terms of going begging bowl in hand to the IMF is the latter’s stringent conditions. But while there may be a certain amount of political hesitation about holding up to international scrutiny the exact nature of CPEC loans — the PTI must keep in mind that there are many within Washington elite circles who continue to warn the Fund against loosening its purse-strings on the grounds that Pakistan is underperforming on counter-terrorism. Indeed, the US succeeded in having this country grey-listed earlier in the year for this very reason.

Thus time better spent would be if the state collectively busied itself with adhering to all FATF prescriptions. This means no more federal ministers sharing the stage with globally proscribed militants such as Hafiz Saeed. Similarly, the picking up of ‘dissenting’ journalists and activists on spurious charges of anti-state activities does nothing to help Pakistan’s case. The end result potentially being that all Asad Umar’s talk of the economy already showing signs of picking up which, by his estimates, includes halving the monthly current account deficit to $1 billion, will be rendered meaningless. For if the country joins North Korea and Iran on the blacklist — the Finance minister will not have the chance to, as he puts it, save the 210-millon-strong population from economic dire straits. *

Published in Daily Times, October 21^st 2018.