Five billion more
On the cards: a $ 5 billion bailout package from the IMF. It would be a tall order for the government to secure another programme from the Fund when the latter is not satisfied with the performance of the government even in the ongoing program. In fact, the current programme is in functional suspension, with the government yet to receive the last two tranches. Why would the Fund want to throw good money after bad? Turbulence in Pak-US relations also puts in another spanner in the works. Americans leverage over at the IMF ensures that a significant quantum of lobbying has to be done at the State Department as well.
What, in particular, has peeved off the IMF? Our lacklustre performance on the revenue and power sector reforms front. But those are just the intermediate variables. The larger picture deals with a general inability to keep deficit low and finances sustainable.
Jumping through more than one flaming hoop is required for this. First, there is the rather prickly process of taking unpopular decisions. Be it the raising of power tariffs or the reform of the GST, there is always the opposition and even certain coalition partners that will milk political mileage through the situation. Even if those pills are swallowed, there is the issue of mismanagement. Consider the power sector: even though the government did increase tariffs, a failure to improve the management in both the distribution companies and the power generation companies effectively brought it to naught. A much scaled up version of this problem is what the government will see when (if ever) the RGST is implemented. The proposed system, though it is devilishly clever, requires much streamlining, databasing and accurate documentation lest the whole thing falls flat.
US support, power and revenue reform are to be the key to the newer programme. Neither of the three seems likely at the moment. But the international tripwire status that the country has unfortunately become would ensure we make some headway.
