- The oft-trodden path and a sense of déjà vu
Satisfied that some of its critical conditions had been duly foreloaded, the IMF has approved a $6 billion bailout package for Pakistan. The IMF programme should provide little satisfaction to Prime Minister Imran Khan as what he has managed to achieve is the 13th bailout since the 1980s. This might reduce some pressure on the rupee for a while and provide opportunities to the government to seek more loans from the International Financial Institutions, thus adding further to the country’s indebtedness. Some of the IMF’s conditions are bound to hinder the fulfilment of promises made by the PTI during the elections. The extraordinarily high interest rate is already stifling the industrial sector. The millions of jobless will therefore have to wait till the economy reaches a growth rate of seven percent which may not be possible during the PTI’s present tenure. Similarly, there is little chance of a government facing an enormous financial crunch investing in the construction of 5 million houses for low-income families.
Reportedly 110,000 people have declared assets under the amnesty scheme and deposited about Rs55 billion in taxes till July 3. The returns are less significant compared to the PML(N) government’s last tax amnesty scheme when over Rs124bn had been collected from 83,000 beneficiaries. An addition of about 100,000 in the tax net will not be of much help either. More determined and sustained effort will have to be made to bring under the tax net millions that continue to dodge taxes. .
Unless Pakistan develops a large export-oriented industry and services sector balance of payments deficit will continue to force successive governments to seek foreign loans. There is a special need to invest in the expansion of the currently miniscule knowledge economy to be able to export high-value goods. It is time Prime Minister Imran Khan pays more attention to vital economic and governance issues instead of continuing to indulge in fire-and-brimstone harangues against political rivals.
It is for the first time that the Army has openly put its weight behind the economic policy being pursued by the government. There is a need on its part to ensure political fair play that alone can guarantee a peaceful environment required for economic growth.
