No escape from IMF?

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Economy would certainly be on the top of the list of priorities of the incoming government. And one hopes that Imran Khan-led PTI government has what it takes to cope with the dire situation.
Asad Omar, the finance minister designate of the PTI government has already said we immediately need at least about $12 billion to meet our urgent obligations on the current account as well as debt fronts.
According to independent economists the best we could do in the shortest possible time is raise no more than perhaps $5billion by going to China, Saudi Arabia and overseas Pakistani millionaire/billionaire friends of Imran Khan with our hat in hand.Mind you, while serving as an emergency band aid the amount in medium term would only add to our mountain of debt.
So, on the face of it, it seems we cannot escape going to the lender of last resort, the IMF for at least $7billion. The Fund has already said that it is not obliged to take orders from the US and refuse an application for help from Pakistan, but warned that the conditionalities this time would be much more severe.
If Pakistan could, it should avoid IMF like a plague because all 21 of its programmes since the late 1950s have only succeeded in pushing the country further down the poverty pit. But then, since there seems to be no way we could escape the Fund, the best one could do of a worst bargain is to negotiate a programme that could be completed in time without any need of waivers and without causing the economy to stagnate.
One hopes the PTI, especially its finance minister designate and its chairman have in the intervening period built a team of economic experts of international repute who are not in awe of the so-called Chicago school scholars who know nothing other than the lessons they have learnt from what is called the Washington Consensus. Asad Omar should get the help of this team to enable him to negotiate the right kind of conditionalities in return for the programme. The past programmes failed because not only the conditionalities were unrealistic but our negotiators as well as our implementers too were inefficient.
Once we get out of the imminent dangers, we should be embarking on restructuring our economy on our own to make it self-sustaining without the crutches of ‘free-lunches’ or high cost commercial debt.
How do we do it? By abandoning the way Washington Consensus has been telling us to manage our economy since at least the theories propounded by Milton Friedman were started being practiced and under whose guidance Reagan and Mrs. Thatcher had re-introduced a free-for-all market economy that made the rich richer and the poor poorer so much so that today just about one per cent of world’s population owns almost 90 per cent of global wealth and the menace of inequality continues to grow.
In its place we should start an open door regional economic policy. We have bottled ourselves economically by closing off our North Western Border now with a fence as well, the Western Border because the US does want us to have any business dealings with Iran and our Eastern Border because India does not give up its military control over our Kashmir.
The Northern Border is too far away from our main-land and is opening up only recently thanks to the game-changer China-Pakistan Economic Corridor (CPEC) project. In the South we have just one small little sea-port in Karachi so far which is not even adequate enough for carrying out with any degree ofeaseour external trade.
The Prime Minister designate has expressed his desire for reopening trade with India, setting up open borders with Afghanistan and improved trade relations with Iran. The opposition should welcome this plan of his with open hearts and minds because the declared policies of main opposition, the PMLN and PPP in this regard do not come in conflict with Imran’s plans to establish lasting peace in a region that is being seen as a nuclear flash-point.
But of course trade with India would entirely depend on how Imran gets India to help resolve the Kashmir dispute and at the same time gets to establish open borders with Afghanistan with the US helping to bring war in Afghanistan to a permanent end.

 

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