PAKISTAN’S progress towards the cherished goal of economic stability has once again been acknowledged as highlighted by Moody’s upgrade of the country’s sovereign credit rating from Caa1 to B3 citing improvements in governance and easing “external vulnerability risks”. This has prompted Prime Minister Shehbaz Sharif to congratulate the nation and appreciate the hard work and sustained efforts of key figures of the Government, pointing out that the development reflects global confidence in the Government’s economic policies and reforms. He added that recognition of the improving economic condition by international financial institutions and rating agencies was welcome.
There are, indeed, signs of movements towards macro-economic stability, marked by easing inflation, stronger foreign exchange reserves, fiscal deficit reduction, current account position and credit rating by global agencies. A month back, the S&P upgraded the nation on the back of “strong institutional stability” and effective implementation of reforms under an International Monetary Fund (IMF) programme. In fact, continued engagement of the IMF is itself an acknowledgement of the country’s faithful implementation of the reform programme across almost all sectors of the economy, which has sent positive signals to other multilateral creditors and bilateral donors. It is also a reality that timely and meaningful assistance and cooperation by friends like Saudi Arabia and China was a key factor in ensuring foreign financing requirements. It was because of the improved economic outlook (as well as complementing strategic environment that Pakistan was seeking a $10 billion exchange stabilization facility from the US, which, if approved, could have salutary impact on economic prospects. While appreciating the achievements so far made through contribution of the relevant authorities, we would point out that the trickledown effect of the macro-economic stability still remains a far off cry despite repeated claims by officials concerned. There are reasons to believe that the reforms have been carried out at the cost of the common man while elite segments of the society are still not willing to contribute their share in national endeavour to put the country on its own feet financially and economically. There are also serious issues of governance as has also been highlighted by the credit agency Moody’s and include weak rule of law, soaring corruption and limited government effectiveness. These issues require no additional resources to address and can be tackled if there was the required level of commitment and vigilance.
