Pak-US relations have passed through ups and downs during the last seven decades and more. At one point Pakistan was designated a “Major non-Nato country.” Later during the US fight against the Taliban, common needs kept the two countries close despite mutual doubts and suspicions. More recently, domestic political needs led former PM Imran Khan to accuse the USA of having conspired to overthrow his government, a claim that few outside the PTI were willing to buy. US Ambassador Donald Blome has now signaled Washington’s intention to engage in a robust two-way communication with Pakistan’s government, political parties and civil society. The announcement needs to be welcomed. While Pakistan may not share the US strategic plans for the region, it would be beneficial for Pakistan to maintain friendly relations with the USA as it faces economic challenges.
Pakistan has suffered economically after it was put in the FATF grey list. Grey listing has had adverse impact on foreign direct investment (FDI) and ease of doing business. The country has faced significant GDP losses for being on the list. Since March when the country was again kept on grey list for another four months Islamabad has made significant progress in meeting the conditionalities of the FATF’s action plan. It has also launched a major diplomatic effort to get out of the list. A friendly USA, instead of a hostile one, would be of additional help in passing the FATF’s test
Pakistan has withdrawn the bulk of petroleum subsidies. Power and gas regulators have determined an increase of 45-50 percent in electricity and gas rates with effect from July 1. The Finance Ministry has reached a consensus with the IMF on the next fiscal year’s tax proposals and the budget framework. We are told that additional measures will be needed to bring Pakistan’s budget for the year 2022-23 in line with the key objectives of the IMF’s programme. Meanwhile inflation is rising fast. While Finance Minister Miftah Ismail hopes to take two to three months to control inflation, former finance minister Shaukat Tareen has estimated above 24 percent inflation in coming months. Unless there is a speedy resumption of the IMF programme and the beginning of lending from friendly countries and international financial institutions, the nightmare scenario being painted by PTI’s financial experts could turn out into a reality. It is here that the USA’s help can make things move apace.
