Pakistan’s political instability, which has resulted in a change in administration in the last five years and four finance ministers being tried by the previous government, is one of several reasons why the country’s economic metrics are unsatisfactory. One of the numerous reasons why Pakistan’s economic indicators are not satisfying is the country’s political instability, which has resulted in a government change in the last five years and four finance ministers being tried by the previous government. Following Miftah Ismail in the present government, Ishaq Daras is the supervisor of the most significant ministry of finance at the time, but the country’s economic indicators have not been stabilized, while foreign exchange reserves are rapidly dwindling and the country’s industries are facing closure. In these circumstances, Prime Minister Shehbaz Sharif’s efforts, particularly those of Foreign Minister Bilawal Bhutto Zardari, resulted in a successful donors’ summit in Geneva to assist flood victims, with more than ten billion dollars promised to Pakistan. Following the successful Donors Conference, the Middle East provided economic assistance to the country.
THE UAE loan of $3 billion, which includes a rollover of existing debt of $2 billion and new support of $1 billion, and the Saudi oil facility of $1 billion will help Pakistan close the external funding shortfall of approximately $34 billion for the current fiscal year. The latest development, like the approximately $10 billion in multilateral and bilateral commitments for flood recovery received in Geneva, is a welcome one for the country. It will buy the government some time as it tries to stave off the threat of a sovereign default caused by fast-decreasing foreign exchange reserves. But avoiding the escalating economic crisis isn’t enough. A stitch here and there may keep us afloat, but it will not solve the economy’s problems. The projected rise in optimism will be fleeting unless the government resolves its disputes with the IMF to restart its bailout programme. As has been repeatedly stated, the Fund’s support is critical in attracting long-term multilateral and bilateral aid. To quickly wrap up the ninth IMF programme review, which has stalled, Pakistan must adhere to the macroeconomic reform plan. This will inspire confidence in the country’s foreign partners and investors. To reassure international creditors, the time gained by the promised aid from the Gulf must be utilised to close the gap with the lender of last resort.
Aside from boosting bilateral trade, Prime Minister Shehbaz Sharif also met with UAE President Sheikh Zayed Bin Al Nahyan to discuss matters of mutual concern. In addition, Germany will provide Pakistan with funding for an energy-saving initiative of 2.8 million Euros. Additionally, it is anticipated that Pakistan’s economic issues will dramatically improve upon receipt of the IMF loan A stable economy is a prerequisite for genuine progress, hence it is hoped that Pakistan’s leadership will exploit recent events to that end.
It would be foolish to believe that the country’s readmission to the IMF will solve all of its economic problems, though. A nation’s economic problems can never be resolved by loans or aid from elsewhere. Support from bilateral and multilateral agreements can only go so far, i.e., they can only give room for the problems that frequently cause boom-and-bust cycles to be resolved. The fact that we have jumped from one IMF programme to another after a few years demonstrates that we have never utilised the time and resources provided by foreign loans and assistance to implement the essential decisions and policies to put Pakistan’s interests first.
