There is no doubt about the fact that the prevailing economic impasse is a cumulative outcome of the wrong and directionless economic policies pursued by successive governments over the last three decades. Almost all the finance ministers appointed on the basis of political considerations failed to deliver and made matters even worse. They did not have the spine to oppose steps they were forced to adopt out of political reasons rather than keeping the stark economic ground realities in view. Unfortunately all the governments relished the populist approach to the economic issues, not realizing that they were pushing the country towards a hole which would ultimately enhance the chances of Pakistan becoming a failed state.
The specific reasons leading to the current volatile economic situation are: tax structure heavily reliant on indirect taxes which account for 70-72 percent of all revenue collected in the country and affect the poor segments of the society more than the rich; lack of reforms in the power sector and making the masses pay for its inefficiencies and corruption by frequent raise in the utility rates and conveniently blaming IMF for the economic woes to deflect political backlash; rising budget deficit; excessive reliance on external borrowing during 2013-17 and artificially keeping curbs on rupee-dollar parity and consequently showing low mark-up and principal payments in the budgets which led to accumulation of unmanageable current account deficit; record borrowing during 2018- 2021; wriggling out of the commitments made with IMF leading to increased mistrust and the continuing political instability in the country.
The challenge is so enormous that the incumbent government has not been able to create any impact during the last one year it has been in power. Resultantly the people and country continue to bear the brunt of the irrational indiscretions of the successive governments. I think it was the right time not to find scapegoats like the IMF to pass on the blame for our economic difficulties, but to adopt a realistic approach to the economic challenges confronting the country.
Though the measures suggested by the IMF ostensibly seem harsh, they are the right recipe to stem the rot in the economy and put it on the path of sustained economic growth. Is it not ironic to note that Pakistan, in spite of going to the IMF for 23 times since 1958 has not been able to get out of the economic quagmire?
The formation of a national commission comprising economic experts, political scientists, constitutional experts and political leaders can help in re-discovering our road-map to peace and progress.
The reality is that successive governments have been making false claims about development and hoodwinking the people in regards to the real situation. All of them have availed IMF facilities but have been criticizing each other for accepting harsh IMF conditions. It has been used as a fall guy without any restraint for political point scoring contrary to the fact that their governments could not have survived without its timely support of the IMF.
The fact is that at present we have no choice except to re-join the IMF programme. However, it will be naïve to assume that with the revival of IMF assistance the economy of Pakistan will suddenly embark on the path of sustained economic growth. The economy is in such shambles that the managers of the economy have no quick-fix solution to reverse the economic meltdown immediately or to mitigate the sufferings of the people belonging to the lower strata of the society. The agreement with the IMF and promised assistance by friendly countries might help in coping with the immediate financial crisis but does not constitute a long term recipe for the revival of the economy.
Looking at the long term perspective there is an indispensable need to take realistic decisions as warranted by economic realities without bothering about the political cost involved. We owe this course correction to posterity. However any reforms will be meaningless without ensuring political stability in the country, which plays the role of a catalyst in economic advancement.
It is therefore not only incumbent upon the government to embark on realistic economic reforms, but also on all other political stakeholders to lend their support to such initiatives and take the masses into confidence as to the difficulties involved and their understanding of them. It is a common and national cause which should take precedence over narrow political agendas and egos. The political leaders and parties need to understand that economic viability strengthened through political stability provided the only means of salvation from the current imbroglio. Politicking can surely wait for better times.
My personal opinion is that our politicians may not be able to tread the path of political reconciliation on their own initiative due to the prevailing intractable polarization. As things stand at the moment it looks a remote possibility. Therefore, they will have to be nudged by a third party, either the establishment or the judiciary to come together and find a way out in the national interest. We surely need a growth model premised on a charter of economy evolved through consensus of all the stakeholders, reforms in the system of governance and settling all the contentious political issues particularly the way we elect our representative. So it has to be a comprehensive dialogue instead of only settling the election date.
We have wasted 75 years through rudderless pursuits and taken undesirable detours from the vision of the Quaid-e-Azam and the objectives of independence. We can no more afford the continuation of this state of affairs. It is a now-or-never opportunity for us to recalibrate our economic and political approaches to find a way to our envisaged destiny.
In my considered opinion the formation of a national commission comprising economic experts, political scientists, constitutional experts and political leaders can help in re-discovering our road-map to peace and progress.
