No running from the economy

• World Bank acknowledges

No surprise, really, that the biggest concern for the caretaker cabinet – after holding timely, transparent elections of course – is the ‘fractured economy’. Briefing the federal cabinet twice in three days, Finance Minister Shamshad Akhtar tried his best to make everyone understand the depth of the out-of-control deficit and fragile reserves, advocating an immediate approach to the IMF. As non-PML-N eyes fall on finance ministry figures, it is becoming clear how the previous government’s expansionary fiscal and loose monetary policies eroded the gains from the Extended Fund Facility’s belt-tightening of six years.

Yet there is a legal glitch barring the caretaker setup from indulging in anything that the proper government cannot undo. Hence a quick return to the Fund is quickly ruled out, which raises a serious question. What to do, in times like the present, when the economy could turn out to be too weak to survive without outside support? Thankfully excess Chinese liquidity is committed to Pakistan for the moment, so things should hold till the next administration can decide what to do. But whatever colourful manifestos of popular parties claim, whoever comes to power will spend the first few months coming up with strategies to avoid default. That is how grim the situation has become.

Even the World Bank, so happy with Pakistan’s ‘growth trajectory’ over the past couple of years, has suddenly changed its mind. It’s growth expectation for Pakistan for 2018-19 has been brought down a good percentage point to five, no doubt factoring in the austerity that an IMF regime, or wherever the begging bowl lands successfully, would mandate. Bowing out, Miftah Ismail put his 2018-19 GDP growth expectation at 6.2pc. PML-N remained as divorced from economic fundamentals while leaving, it appears, as it was when taking over. The caretaker administration can, at least, lay the groundwork of a sincere and ‘do-able’ plan, which could save previous time for the next government.