- FATF concerns
Perhaps if the finance minister could have been unhappy with ‘various stakeholders’’ casual response to FATF queries earlier we would not be staring down the barrel at this point. It was his job as finance minister, after all, even if he had been office just two minutes. The FATF has far reaching implications. Even if the government is able to get all our friends to bail us out of our present predicament, a possible blacklisting would raise fresh problems in no time. Not only would we not be able to go out begging again, but our bonds would also demand much higher rates, ruling them completely inefficient.
It’s pretty clear that the finance ministry suffered from a degree of paralysis in its first few weeks. First it stayed silent on the matter of the IMF loan, then repeatedly sent contradictory signals that pushed the equity market into a tailspin; making it hemorrhage billions of rupees needlessly. Even now, as the prime minister tries to secure preferential payments and billions in temporary loans from other countries, a program with the Fund is not completely ruled out. In the worst case scenario, which everybody must prepare for, we might end up accommodating lender friends and still face stiff IMF austerity.
The government is right that it is held back from any progressive investments because there is just no money in the kitty. But, then, it’s not as if PTI contested the general election to rule over some other country. It knew the state of affairs – indeed, that is why it came down so hard on other parties on the campaign. And it gave the impression, at least, that it had some sort of a plan ready; which is why many bought into the 100-day promise, etc. Now, though, it seems there was just no homework. And all the work the interim government did to prep up a possible IMF program was also wasted. The unhappy finance minister must note that the people are not too delighted either; and their fortunes do not seem improving, from the looks of things, in Naya Pakistan.
