Bleak outlook… Kamran Yousaf
Inflation in Pakistan has broken the 50-year record. The countrys foreign reserves have plummeted to the level of only a few weeks of imports. The rupee is in a free fall, meaning more miseries for not just for poor segments but for all the classes. Amid fears of an economic meltdown, a growing number of people are either leaving the country or making efforts to find a future elsewhere. Official data shows over 800,000 Pakistanis left abroad in 2022 and more people are queuing up. Immigration consultants say for the first time people who have never thought of leaving Pakistan are now seeking advice for settling abroad.
The years of economic mismanagement amplified by the political instability has shattered the confidence of people in this country. As people haplessly watch their country slip further, those at the helm as well as stakeholders are busy trading blame. Thursday saw bloodbath in money markets as well as at the stock exchange. Also, the SBP further jacked up the interest rate to curb inflation. All these moves were aimed at ensuring early staff-level agreement with the IMF.
The deteriorating economic situation has drawn strong criticism for Finance Minister Ishaq Dar. The so-called economic guru replaced Miftah Ismail in September with much fanfare. In TV talks shows he boasted his credentials and made tall claims that the dollar would come down to less than 200. Instead of implementing or staying the course of the IMF, Dar opted to find other alternatives. He may have good intentions not to burden people further with the impact of tough IMF conditions but the fact remains that he failed to realise that such an approach would only make matters worse.
The PDM already wasted a precious time to bring some semblance of sanity in the deteriorating economic condition. The first major folly the Shehbaz Sharif led government committed was to delay the withdrawal of oil subsidies former PM Imran Khan gave just weeks before his ouster through a vote of no confidence. Had the government taken the decision on the first day in office, the situation would have been different today. Miftah eventually prevailed when the oil subsidies were withdrawn. It was natural that reviving the IMF programme had a cost. But Pakistan did not have any other option as our friends even refused to bail us out without the IMF cover. When the situation began to look better at least in terms of necessary economic actions, PML-N brought back Dar. He instead of implementing the IMF conditions decided to seek financial bailout packages from friendly countries. For several weeks Dar kept giving statements that soon some good news would come but that day has never come.
Dar has now, in private meetings, admitted that it was his mistake to rely on friends. But he took a good four months to have that bitter realisation. Had Pakistan stayed the IMF course, the situation might not have changed significantly but at least there would have been a certain level of certainty. Now, the situation is such that Pakistan despite taking all tough measures in one go that is having a cascading impact on the economy, the IMF is still reluctant to seal the deal. It is because of our lack of credibility. Some of the conditions which, in normal circumstances, would have to be fulfilled after the release of an IMF tranche have had to be met as prior action now.
We only have ourselves to blame. The trouble is that even if the $1.1 billion tranche, which is under review, is released in coming weeks, that wont solve our economic problems. In fact Pakistan will have to start negotiating another programme once the current one ends in June. This means that no matter which party forms the next government after the elections, it will not have any honeymoon period. It has to hit the ground running. The future doesnt look prosperous!
Courtesy The Express Tribune