Information Minister of Pakistan Attaullah Tarar on Wednesday, March 13 said in Islamabad that Prime Minister Shehbaz Sharif holds three to four meetings on the country’s economy every day. “The premier is working to end inflation and unemployment,” he said.
What he did not say was that the economy is tanking and the country is on the brink of insolvency. Incidentally, this is the most serious economic downturn in 76 years of Pakistan’s existence, and the drying up of investments is gnawing at it. To paper over its frailties, Pakistan started the Special Investment Facilitation Council (SIFC) in June 2023.
The logo of SIFC has words `Rising Pakistan’ which contrast sharply with the reality of a sinking Pakistan. Headed by the PM of the country, the SIFC has a very unwieldy composition, as all federal and provincial ministers, secretaries, and representatives from the armed forces are its members.
It may sound interesting but odd that the focus of SIFC is on “providing agricultural land in central and southern Pakistan to prospective investors from the oil-rich Middle East’’. So much for attracting investment in industrialisation or other sectors which can uplift the economy. What will the rich Middle Eastern nations use these lands for? Well, if one goes by the reports appearing in Pakistani newspapers, these countries will help in modernising agricultural practices and get better yields of crops!
What is SIFC if not another platform bringing disparate people together? Caretaker PM Anwaarul Haque Kakar had projected an unrealistically high astronomical figure of $50 billion in investments through SIFC. Interestingly, no politician in power is willing to take up basic economic reforms like widening tax base, taking on powerful feudal agriculturists and those in wholesale businesses.
Contrast $50 billion with the reality of new Finance Minister Muhammad Aurangzeb writing to IMF for the next tranche of less than $2 billion loan! It is worth mentioning here that Pakistan has a terrible record of its dealings with IMF. So far, it has gone to the IMF 24 times but completed the programme only once (1/24!). Even now, FM Aurangzeb’s first priority is to secure a longer and larger bailout package from the IMF. (In contrast, India has taken loans from IMF on seven occasions and it was in October 1991, nearly 33 years ago, that it has gone to the lender last time.)
In the last couple of years, Pakistan has been close to sovereign default a number of times. In simple words, sovereign (debt) default is the failure of a national government to pay its debts. Pakistan avoided sovereign default not by repaying debts but because of repeated rolling back of maturing loans. Rolling back of their debts was done by Saudi Arabia, UAE and China, and coupled with IMF support, Pakistan has come back from the brink every time.
The IMF insists on economic reforms being implemented by the borrower, but this is not something Pakistan has done. Very high inflation, widespread unemployment, and significant budget and current account deficits (CAD) are problems that Pakistan is facing. But instead of tightening its belt, and repaying loans it took left, right and centre in a wanton manner, a section of Pakistanis is blaming India for its troubles!
These Pakistani crack-heads are spreading canards that senior IMF official Gita Gopinath, who is of Indian origin, is creating problems for their country. Incidentally, the IMF lends money only after Debt Sustainability Analysis (DSA). That is a standard procedure that usually lenders, big or small, conduct in all their dealings. The real problem is that for too long Pakistan has lived on doles and outright grants.
