Pakistan has been grouped together with Iraq, Somalia, Sudan, Syria, and Yemen by the IMF in a report released on the sidelines of the World Bank-IMF spring meetings. Incidentally, all these nations are currently in the midst of civil war and considered war-torn economies, marked with low or nil growth and high inflation.
Most of these countries are facing internal civil wars, and Pakistan being clubbed with them means IMF recognises it is no better than them. Once this report gets wider coverage, it will affect Pakistan’s international prestige and harm investment. This also shows that the Finance Ministry of Pakistan has failed to assuage IMF’s top brass about the country’s credentials.
According to IMF, a country was labelled as being in a conflict if at least 25 battle-related fatalities were recorded by the Armed Conflict Location and Event Data Project between January 1, 2024, and March 8, 2024. It needs to be mentioned here that in the first three months of 2024, till March 31, Pakistan has seen 245 attacks, resulting in 432 deaths and injuries to at least 370 people.
Due to the high number of these fatalities, Pakistan is unlikely to shake off its classification with war-torn countries any time soon. Restive Khyber Pakhtunkwa (KP) and Balochistan provinces have together accounted for almost 400 deaths. While 5 Chinese engineers had died on March 26, five Japanese citizens narrowly escaped being killed in Karachi on Friday (April 19). Two suicide bombers attacked the bullet-proof vehicle the Japanese were travelling in but they had a providential escape.
It needs to be mentioned here that Pakistan’s population growth rate has been estimated at 2.6 per cent highest in whole of South Asia. On the other hand, the IMF has estimated a very low growth rate of 2 percent only. This clearly means that there will be more unemployment and poverty in the country hit hard by waves of very high inflation.
IMF’s Middle East and Central Asia Director Jihad Azour said the Fund was ready to support Pakistan. However, he stressed that the package of reforms was now more important than the size of the new programme. The new program here means the size of the loan in billions of dollars and the period of time (in years) Pakistan is seeking from the IMF.
“I think what is important at this stage is to accelerate the reforms, double down on the structure of reforms in order to provide Pakistan with its full potential of growth,” Azour said. He was replying to questions relating to Pakistan put to him by a Geo TV reporter, and another one of Pakistani origin reporting for Voice of America (VoA).
Two Geo News (of Pakistan) and Voice of America (VoA) reporters had asked pointed questions regarding Pakistan at the press conference. One reporter also asked what were the key loopholes in Pakistan’s policy were that kept it behind peers, or others in the region? Peers or others in the region made a veiled reference to Bangladesh and India, which are doing better economically than Pakistan.
The IMF official said it was clear Pakistan would need to carry out reforms and reduce its budget deficit. This will have to be done by increasing revenues to address the precarious debt situation. The second important part was to reform the chronically ailing energy sector. The third important step was to increase the potential of the economy to grow by improving the business environment as also encouraging the private sector.
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