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Pakistan’s Economic Puzzle

January 8, 2024 at 11:34 am | Economic Affairs

Either the IMF advice has a problem or Pakistan has failed to implement the economic reforms under the IMF policy guidelines?

By Prof. Engr. Zamir Ahmed Awan

Pakistan’s current economic model is not working since it has fallen behind its peers, significant progress in poverty reduction has now started to reverse, and the benefits of growth have accrued to a narrow elite, observes World Bank Country Director Najy Benhassine.

“There is a broad consensus that action is needed to change policies that have plagued development, benefitted only a few, and led to very volatile and low growth,” Benhassine stated in a Policy Vision article, published in the latest UNDP publication.

It is true that Pakistan is not performing well in term of economy. But, who is responsible for this chaos? International Financial Institutions like IMF are deeply involved in Pakistan and giving policy advice to improve economy.

As a matter of fact, Pakistan has sublet its economic policy to the IMF since 1988. Either their advice has the problem or Pakistan has failed to implement the economic reforms under the IMF policy guidelines? I think, Pakistan is very much obedient and trying its best to implement their policies in true spirit. If yet, it failed, there must be something problem with the IMF advice.

No doubt, the IMF is full of leading experts in various aspects of economy, and they must be sincerely working to improve the financial conditions of Pakistan’s ailing economy. But, what we have witnessed in other countries like Argentina and Egypt, the IMF has also failed to show positive results on ground. On the other hand, Brazil, after quitting from the IMF programme, has improved a lot. It has become a much rapidly expanding global economy.

The IMF is a global organization that works to achieve sustainable growth and prosperity for all of its 190 member countries. It does so by supporting economic policies that promote financial stability and monetary cooperation, which are essential to increase productivity, job creation, and economic well-being. The IMF is governed by and accountable to its member countries.

Pakistan has availed the IMF bailout package for 23 times since July 11, 1950. Yet, the IMF failed to produce its mandated results. Yet, the IMF failed to produce its mandated results. Each of the IMF programs ended with strong recommendations for the next programme. Is this a solution? How long? The nation is desperate and wanted a solution, which should be self-sustainable.

Unfortunately, most of the rulers in Pakistan went to the IMF just to borrow money and pass their tenure comfortably, with the expectation that the incoming government will pay back their loans. All governments were thinking in the identical manner and the debt kept on growing with the expectations that the future Governments will pay back.

All governments in the past were thinking only to borrow more and pass their tenure. Their wrong decisions have been costing the poor people of Pakistan. Todays, inflation, price hike, high interest rates, devaluation of local currency are all due to wrong advice of the IMF or wrong decisions of the ruling elite, but, the price is being paid by poor public.

While the need was to introduce policies to create wealth indigenously and generate revenue domestically. The luxury, which we cannot afford, should not be met through borrowed money. There was a need to learn to live within our own means.

Even till date, looking at our import data, there are many items, which are not basic necessities of life, or beyond our affordability. Being an agriculture country, we import fruits, cheese, chocolates, biscuits, cakes, dairy products, dry milk, nuts, etc. Additionally cosmetics, perfumes, and many other luxury items are still on out import list.

Exports policies are not enough friendly and facing many red-tape hurdles. Foreign Direct Investment is also facing many obstacles. National productivity need to enhance, which requires appropriate policy incentives. Law and order situation is also impacting adversely on our economy. Street crimes has grown, even in the big cities including capital Islamabad. Political instability is also having a negative impact on our economy.

It is well understood the challenges are rather complex and not so convenient to mend ever thing over night. But, it is matter of mindset that if wanted to change our fate or not? Is there a will to change our fate? Allah may help us, we are a capable nation, rich in natural resources and human resources, and most resilient nation on the earth.

It is time to think wisely and act smartly. It is urged that policy makers and decision makers must realize the sensitivity of situation and make right decision in the best interest of the nation. Right people should be involved and consulted in any major decision making. Think above political interests, or provincial or regional interests, or institutional interests, or personal, family and tribal interests. If the country is strong, every ones interests will be protected. 

Although, there have been voices against the wrong polices in the past, but it seems the policy makers and decision makers were not paying any attention to wisdom of Pakistani intellectuals and experts and blindly following the lenders – IMF.

Although Western cultivated plants in Pakistan are forcing to deteriorate our economy, yet, we should not give up and keep on struggling. It is appealed to scholars, intellectuals, academicians, politicians, business communities and all individual Pakistanis to thing wisely and act smartly, keep on educating the ruling elite and power houses, with a hope, they might change their mind-set and change the fate of the entire nation. We should not surrender and wait till it is too late and reached an irreversible situation.

The writer is the Founding Chair GSRRA, Sinologist, Diplomat, Editor, Analyst, Consultant, Advisor, and Non-Resident Fellow of CCG. He can be reached via E-mail: awanzamir@yahoo.com

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