The government seems ready to bend over backwards to get a deal with the IMF, whose ninth review has been pending, and since Prime Minister Shehbaz Sharif not only met IMF MD Kristalina Georgieva thrice on the sidelines of the Paris Summit, but also huddled with Saudi Crown Prince Muhammad Bin Salman. Not only has the government introduced a mini-budget before the new fiscal year has begun with new taxes of Rs 238 billion imposed, but it has also lifted all restrictions on imports. While all of these measures might result in a staff-level agreement leading to the IMF approving more loans for Pakistan, with a consequent relief for the next financial year, it actually probably means no more than kicking the can down the road, for even at the cost of further indebtedness and constant interference in government management of finances, the country will probably find itself in the same situation a year down the road, surviving fearfully, from one debt servicing payment to the next.
If either a PPP or a PTI government is elected after the next general election, it will blame this coalition for making agreements it could not honour. To avoid such an eventuality, it is essential for all parties to accede to a Charter of the Economy, and agree on how to move the country forward, while making a commitment to those goals. The taking of the reins by a caretaker government before an election provides continuity of policy, while a Charter of the Economy would provide at least some certainty about the post-election future.
The difficulty with which this IMF review is being completed is perhaps unprecedented. There was a time when it would simply have been abandoned and a new one started. Even now, it seems more than likely that a new programme will immediately succeed upon this one, and may contain some of the essential reforms that have been avoided in this one. In that case, this is probably the best time for the parties to come together and agree on a Charter of the Economy. It is perhaps helpful that at present none of the parties has any fundamental differences on economic policy, whatever they might have done in the past, or whatever they might be considered to be at present. It is essential that all parties with any hope of being part of government come on board, with one benefit of such a process being a restoration of some of the civility among politicians that has gone missing of late.
