Somewhere sitting in dark rooms, the shrewd men of the establishment must be feeling the heat as Pakistan’s foreign reserves have dwindled to US$8 billion, a new low of recent times. Pakistan is doing everything it can to secure an International Monetary Fund ( IMF) bailout to thwart an economic crisis.
Prime Minister Imran Khan met with IMF chief Christine Lagarde in Dubai to pursue a quick bailout package, but the meeting ended with only a pledge from Lagarde to continue the talks. No significant development or agreement was reached. And yet Pakistani Finance Minister Asad Umar said, “Our differences have narrowed and it seems that we have come very close to having an agreement with the IMF.”
The talks with the IMF were initiated last August, but the Fund has not agreed with the pace and scale of reforms in Pakistan and has insisted on more strict measures such as increasing the electricity tariff, more tax on income, goods and services, and of course the further devaluation of the currency.
It has to be noted that in the past, Khan was critical of foreign loans, and even stated, “I would commit suicide rather than seeking an IMF loan.” However, like always he has taken another U-turn and now he is doing everything to to get the loan from the IMF.
The reason is the inability and incompetence of his government in handling the economic crisis and not being able to devise a concrete economic plan. If you ask the prime minister, or the finance minister, or the information minister what is the plan of the government to tackle the current economic crisis, all will give the same answer: that everyone in the country but Pakistan Tehreek-e-Insaf (PTI) is a thief and corrupt.
Meanwhile as the PTI focuses on proving that Nawaz Sharif was the most corrupt leader of the country, the inflation rate in Pakistan has gone up, and the country’s growth rate has slowed. Moody’s Investors Service has given a negative rating to the banking sector, while Standard and Poor’s has downgraded Pakistan’s overall rating. Though Pakistan received $10 billion from Saudi Arabia and other Gulf states, it still needs an IMF bailout to thwart the economic crisis temporarily. It still is not known where the aid from the Gulf states has been spent, as we have yet to see any major infrastructural project from the PTI government.
Unlike Khan and the PTI, Nawaz Sharif said goodbye to the IMF in 2016 and announced that the country could sustain itself without a bailout. Nawaz’ tenure was highlighted with infrastructure mega-projects, urban transportation services, buoyant construction activity that strengthened private-sector credit growth, power-generation projects and investment in the China-Pakistan Economic Corridor (CPEC). Sharif did borrow, but those loans were spent on the mega-projects and debt servicing, in contrast to the PTI government, which has not been able to lay down even the foundation of any project.
All it has to offer is the promise of a bright future while persecuting Sharif for his corruption. The only thing it has announced so far is an increase in defense spending, and that says it all: that the PTI government is feeling the heat of the moment and trying everything possible to appease the men who control the political proceedings from behind the scenes.
Coming back to those men sitting in their dark rooms, they too will be feeling the heat as they know that the government they brought to power through political engineering is not capable of handling the economy. This could become the reason for the fall of their empire as the economic turmoil gets worse.
Even with an IMF bailout one needs a team capable of bringing in structural reforms in organizations, increasing investment and laying down the foundations of mega-projects
Even with an IMF bailout one needs a team capable of bringing in structural reforms in organizations, increasing investment and laying down the foundations of mega-projects. The problem is that the Khan-led PTI is incapable of perceiving a vision for the country. Khan’s rhetoric of fixing everything in no time was always a blatant lie to fool his blind followers.
So Khan, who knows that he along with his team is not capable of governing the country, is focusing on corruption, and making his blind followers think that Sharif and other political leaders plundered the national wealth – such a strange thing that in a country where most of the budget is spent on defense there still exist clueless minds who believe that their tax money is being looted by the politicians.
On the other hand, even two years after Sharif was dismissed from office, Khan has kept his ghost alive. Little does he know that he is playing into Sharif’s hands, as by mentioning him all the time he has kept Sharif alive in the game and with the dismal economic performance he is paving the way for Sharif’s comeback.
The forces who brought Khan to power will only keep him there if he somehow manages to pull in money in the form of loans and bailout packages. The question is how long he can keep this up, and what price Pakistan will pay in return for the favors accepted from the Gulf states. Sooner or later the IMF will release the loan for Pakistan, but will an irresponsible and immature government be able to make use of this money or will it still bank on the policy of fooling its blind followers by presenting Sharif as a bogeyman?
After all, mere sloganeering against corruption while doing nothing to correct the economy can never bring any change to the fragile political and financial systems. The shrewd men sitting in the dark rooms, after watching Khan’s unsuccessful witch-hunt and inability to lead the country out of economic turmoil, will be making a Plan B to keep the game alive and move the country in their desired direction.