Daily Times

Pakistan has always been that mid-way existential crisis for economists across the world. It is a mixture of factors and externalities that truly have an equal contribution to -what some may call- a diverse nature.

If prices are high globally, they skyrocket in Pakistan. If they fall globally, they cause inflation here. There is no direct forecast for any foretold or resourceful assumption that could be made from any type of data, whatsoever.

According to the world bank, annual GDP growth is at a 0.5 percent annual change, as of 2020. Whereas, countries such as Bangladesh and Iran, are north of 1.5 percent, where Bangladesh is touching a whopping 2.5 percent annually. The same Covid hit Pakistan. But what made Pakistan’s recovery slower?

And, no Coronavirus is not to blame for any of this. If anything, Pakistan had a slightly better chance at Covid, but it was the ripples of previous, decade-old economic crises that made things, the shape they are moulded into today.

According to a study at the Center for Public Policy and Governance, Pakistan’s economy faced an array of situations to handle in the 2008-09 Financial crisis, including effects like, “serious deceleration of economic growth, worsening current account balances”, and “widening fiscal deficits”.

If prices are high globally, they skyrocket in Pakistan. If they fall globally, they cause inflation here.

Bottom line is, sugar prices increased by 10 percent, and never stopped at that. Month after month, year after year, commodities like Sugar and Flour, became impossible to attain for many. Some because of an ineffective demand, others due to the unavailability to purchase, since many suppliers had refused to sell a highly taxed product, due to which the crisis preceded many others to come.

Recently, a debate sparked by the Finance Ministry’s move to negotiate with the IMF also led to a conversation on Pakistan’s overall economic structure and the stark contrast it had with its core values before such decade-old developments. The IMF has also labelled the nation’s economy as vulnerable. This goes to say how much of a collapsing condition this puts the general public at.

The total external debt for Pakistan is already a third of its GDP. And that could cause concern among many, looking to what people may call a stand-still economy.

The IMF also set 6 new conditions amongst which a highlight is demanding, “recapitalization of the two private sector banks”, and also providing a higher number of taxpayers into the taxpayer net. This would genuinely affect revenue for businesses, otherwise classifying it as profit. The tax collection would also be outside of Zakat, and other welfare acts but must detail another cap on taxpayer numbers, specifically.

Steps like such, would make Pakistan’s economy a more profitable environment for investors, and also provide for a stable economic system for years to come, but would not cater for the need of evolving the economy. Same steps, different times.

Let’s look at it like it is. If petrol prices go up in the next few days, so will basic commodities, followed by an increase in inflation, and consequently, the formation of a monetary policy will be useless because of the inability to act boldly, in time.

The IMF’s conditions are highly reputable and could surely go on to deliver for the economy’s somewhat prosperous recovery. But the fact that we persistently delay and ignore such conditions and outlooks within our partisan lens is something that can cause headaches in the future.

It’s time for us to look at the world differently. Or at least, the country differently. Forecasting has clearly done us little good, in the past few years. It’s time to act. And no, not on self-made rules. On rules made by professionals, to avoid a further haphazardness of events.

The writer is a freelance columnist.