At last, the newly-elected government is in the saddle. Whether elected by fair means or foul, the onus is now on the current regime to set the ball rolling and reach a consensus with the country’s leading stakeholders, notably the Establishment, on how to put an end to the ongoing political stalemate and pull the country out of the acute socio-economic crisis. Pakistan is, once again, teetering on the verge of sovereign default and ensuing financial collapse. Unlike the past, however, it is no more rocket science for every Tom, Dick, and Harry to figure out that Pakistan cannot move an inch without the IMF’s help. Even a street urchin is aware of the grim reality that the new government has to negotiate a long-term arrangement with the IMF, a global lender known for boasting of my-way-or-the-highway attitude, particularly to struggling Third World economies like ours. Much to our chagrin, the country of over 24 billion people desperately needs a new IMF loan of at least $6 billion in an Extended Fund Facility to keep its $350 billion economy stable and to help it repay billions in debt due this year.
The good thing is that the IMF has shown a willingness to work with Pakistan’s new dispensation. However, besides the inevitable IMF bailout, what else the Ministry of Finance has in its so-called economic agenda is still unclear. Heaven only knows about those harsh IMF conditions set forth for another tranche, coupled with the desired impact of these conditionalities on the dwindling state of the economy in general and on the country’s poor masses in particular. Most importantly, who will bear the brunt of those cruel conditions: the people on the breadline, or the one-percent ruling elite comprising the civil-military bureaucracy, the landed feudal groups, the filthy-rich industrialists and well-healed bourgeoisie with greater capacity and power to exploit, manipulate and tamper with the entire distributive system of the state in their own favour. As their rulebook suggests, when it is no longer impossible for the ruling elite to extract more from the economy, it, by design, brings the economy to the brink of collapse and wilfully surrenders to the IMF’s harsh conditions because it will always be the people of the country who will be used as collateral for the hefty loan, withstanding the devastating effects of IMF-induced reforms in the form of hyperinflation, spike in unemployment, grinding poverty, pure hunger, and extreme deprivation. A saviour of the elite interest, the IMF always emerges to rescue the ruling elite as they both enjoy a win-win partnership with each other at the expense of the public good. And the vicious cycle goes on.
Although the word ‘Reform’ happens to be a much-touted expression used for political point-scoring, one wonders what are those ‘rescuing reforms’ the country has yet to undertake, and when would the opportune time come to implement those reforms, and in which sectors? It is no mean feat for a country to embark on the treacherous path to fiscal stabilisation and economic reforms. Without much ado, Pakistan must undertake a slew of all-encompassing reforms to tame the budget deficit, reduce its mounting debt load, and address its entrenched socio-economic challenges. However, can the lavishly paid, most thoughtful minds in the corridors of power think beyond borrowing more money from the IMF to pay off existing loans and filling the financing gap with such back-breaking reforms as fiscal austerity, trade liberalization, currency depreciation, high-interest rates, and open capital markets? Unfortunately, neither of us knows the answer.
Syed Jawaid Iqbal
President & Editor in Chief