Daily Times

While it is clear that nobody held their breath as the budget made its way through the national assembly, you can be sure that Finance Minister Miftah Ismail would have still breathed a sigh of relief after it. Technically, at least, we are now one step closer to securing the return of the IMF bailout program, without which nothing will work, and the country will not be able to meet debt repayment deadlines scattered throughout the new fiscal. But considering how things have progressed over the last fortnight or so, you can never be too sure about the Fund’s response, so the minister would be relieved, but not yet enough to celebrate.

Even when he was sure that the lender would make a positive announcement just a couple of days ago, and predicted as much to lift the mood of the market, he was bitterly disappointed because not only did the good news not come, a little more bad news did, and now there are even more “prior conditions” to meet. Thankfully, though, getting the budget through the house was the most important demand, and it has now been met. The government has also duly raised taxes like it was asked, and now that the IMF budget is ready, IMF’s loan should be too.

But even if the resumption of the program does not run into any more unpleasant roadblocks, there will be very little to celebrate because all we will win is the ability to keep borrowing to pay back interest on old, maturing loans. There happens to be zero room in this budget for any sort of capacity building, etc, so any progressive work, which will yield results far down the road, would have to wait till at least next year. Everybody must realise that this small window must be used productively because if we do not upgrade our production and export matrix, the country will definitely default in the not-too-distant future. Over the years, we have built one of the biggest debt burdens in the world, yet very little, if any, at all, of that money has gone into concrete development. If that still does not happen, the economy will collapse. For now, though, all eyes are on the IMF to see when it resumes the bailout program. *