Plan B
Finance Minister Ishaq Dar chose the traditional post-Budget press conference to announce that the government was making plans for a future without the IMF. Not normally the forum where major announcements were made, it was possible to see a number of influences at work. Clearly, life after the programme does not mean life without the IMF, so there were no bold and brash statements about the IMF and its programmes, and no categorical declarations of independence. More to the point, there was no denial that the Budget had been made with the IMF in view, not so much to persuade it to release the remaining part of the stuck-up programme, as to provide a basis on which to build the next programme.
Senator Dar’s statement that the details of this Plan B would only be revealed at the right time, combined with his saying that the need of the hour was self-reliance indicated that the government was thinking of import restrictions, perhaps formalizing some of the restraints already in place. Unfortunately, Pakistan has experienced such curbs already, and for long enough, to realize that they merely mean a contraction of exports, so the savings in the import bill are merely lost in export proceeds. One might prefer to pay attention to Mr Dar’s Minister of State, Dr Ayesha Ghaus Pasha, who had earlier said there was no alternative to the IMF. Senator Dar has spoken bravely of Pakistan not defaulting, but with no pressing geopolitical reason to support Pakistan, help from friendly countries has been linked to IMF approval. The problem seems to be Pakistan’s refusal to abandon China in its confrontation with the USA.
The entire Budget is predicated upon Pakistan continuing to have access to the international money markets. Too much of Pakistan’s budget is going towards debt servicing. It is not a matter of finding funds for education and health. General administration and defence is going to be paid for from borrowed money soon. There is no easy way out, there are no shortcuts. The stagflation Senator Dar is presiding over cannot come to an end in the international environment of instability thast reigns. Mr Dar should concentrate on effective measured rather than try to sell the tired old slogans like self-reliance that have been tried in the past, and found wanting.
