WITH just seventeen days left for the stalled programme of the International Monetary Fund (IMF) to expire, Prime Minister Shehbaz Sharif has expressed the confidence that an agreement would be signed with the global lender by the end of the month, asking the nation not to worry in this regard. Speaking at a ceremony in Lahore on Sunday, the PM said he had a long conversation with the IMF chief and committed to meeting all conditions for the loan and providing the required budget information.
The Prime Minister has all along been expressing optimism about resumption of the programme and he might have reasons to say so as the Government accepted almost all conditions imposed by the Fund even at the cost of its political capital. However, we have seen that the IMF remained non-committal despite faithful implementation of all measures proposed by it to the Government, strengthening the impression that the programme was being used to pressurize Pakistan. Apart from reports that the IMF was linking the programme to the nuclear programme of the country, there were also statements that are seen as gross interference in the internal political affairs of the country. Therefore, the optimism being expressed by the Prime Minister notwithstanding, there are no bright prospects for a deal with the Fund before expiry of the current programme. Analysts point out if the IMF was not ready to sign an agreement during the last one year; there is hardly any likelihood of an accord when the incumbent Government is believed to leave in August on completion of the term of the present assemblies. They say the IMF is not expected to sign an agreement with an outgoing Government and might prefer doing so with the new Government after the next general election. The Prime Minister has also alluded to this possibility when he said people of Pakistan faced challenges before and would do so again in case of a delay in resumption of the IMF programme. We have been emphasizing in these columns that the country and its people have suffered hugely because of their over-reliance on the IMF/foreign loans and it is time to say goodbye to the Fund and base our policies and plans accordingly. This is because we left the rupee at the mercy of circumstances at the instance of the IMF and to realize the cherished objective of increasing exports meaningfully but this goal remains a far off cry. Instead, costly raw material and an alarming increase in the cost of production have rendered our exports uncompetitive in the global market besides stoking unprecedented price-hike for the people of Pakistan. Some circles are criticizing Finance Minister Ishaq Dar but the fact remains he successfully managed the economy in the absence of committed loans by the IMF and he has the capability to do so in future as well. It was because of his prudent policies and approach that the country effectively avoided default, which was quite imminent, all external payments were made as per original schedule and current account deficit was reduced to an amazing level. The budget for the next financial year has wisely been prepared to tap the potential of all those sectors that are considered as ‘drivers of growth’. These include incentives and relief for agriculture, IT and IT-enabled services, industry and construction. There are bright prospects for self-reliance as we do not need foreign loans to exploit the potential of our agriculture and produce enough not just to meet the domestic requirements but also for export. The Finance Minister, while presenting the federal budget, has rightly pointed out that the country would start benefiting from the budgetary measures aimed at boosting the agriculture sector as gestation period for this sector is remarkably less. Similarly, a quantum jump in IT exports would also help overcome the foreign exchange shortage. The new budget also envisages the right kind of incentives for the Overseas Pakistanis to send more, through legal channels, back home and materialization of this expectation could also mean availability of more foreign exchange. Of course, the country needs to focus on revenue generation by plugging loopholes and bringing non-filers and under-filers into the tax net. Expenditure control is another area that needs greater attention in the backdrop of an elaborate policy announced by the Prime Minister to save money but has not been properly implemented.
