As speculations were rife and played up further by a political party that the country’s perceived risk of default has spiked to over seventy five percent, Finance Minister Ishaq Dar in a televised message on Saturday was very emphatic in his statement that Pakistan will not default and would meet its upcoming one billion dollar bond payment.
He went on to say that arrangements have also been made for payments to be made next year.
This positive statement on part of the finance minister would definitely be received well both by market and private sector including foreign and local investors.
This was necessary and timely to do away with uncertainty and confusion surrounding the economic situation.
There is no reason not to believe words of Ishaq Dar who on multiple occasions in the past steered the country out of difficult straits through better understanding and management of issues.
Because of his ability and capability, Dar also enjoys good repute in international financial institutions.
There is no denying that the country today is faced with a worrisome situation yet we believe the present government will be able to aptly handle it.
We understand that default risk will normalise after inflows from the IMF and some friendly countries are materialised.
Hence efforts should be accelerated to complete the ninth review with the IMF for receipt of next tranche.
Both China and Saudi Arabia have also reportedly given assurances to help Pakistan in this difficult hour.
We should also complete damage assessment of flood-affected areas at the earliest to avoid any further delay in the holding of donor conference.
Financial assistance for reconstruction and rehabilitation of people affected by flood will also provide much needed support to our economy.
At the same time, government must come up with plans to attract more remittances from overseas Pakistanis who should also be engaged to bring their investments in the country while simultaneously curbing unnecessary imports.
There is only one panacea to our economic woes and that is to significantly bolster our exports.
For this to happen, we will have to pay special attention and offer incentives to exploit true potential of our productive sectors especially agriculture, industries and Information Technology (IT).
