THE PDM government would like nothing better than for the nation to forget that the only reason it has been avoiding turning to the people for a vote of confidence is because of how catastrophically Finance Minister Ishaq Dar has mismanaged the economy during perhaps the worst crisis in Pakistan’s history.

With the nation’s attention these days firmly affixed to the escalating rhetoric from one branch of the state against another, a globally respected economist has issued the stern warning that the country’s economy has almost come undone.

Princeton University professor Atif Mian, a Pakistani-American widely regarded as among the top economists of our times, recently shared his deeply worrying analyses of Pakistan’s trajectory on Twitter.

In his words, recent data suggests that the Pakistani economy is “unhinged” and has gone “off the rails” after losing the confidence of its key stakeholders.

Dr Mian describes ‘providing confidence’ as one of the most important aspects of policymaking, as it ensures that people will remain willing to invest in the country and enable a better future.

He surmises that this confidence is now missing in Pakistan’s economy because of what he describes as a breakdown of Pakistan’s “nervous system” — “that combination of administrative and political structures that guarantee a certain level of confidence in the economy”.

The professor says that supply-side disruptions caused by Islamabad’s prolonged failure to secure an IMF agreement, Mr Dar’s problematic fixation on the exchange rate while reserves were declining, and his highly constrictive import policies have lost the country its credibility by engendering a “feeling that either nobody is in charge, or those in power have no idea what they are doing”.

With both exports and imports declining at much sharper rates compared to regional economies, inflation “off the charts, and extremely dangerous”, and the government in no position to control the exchange rate, Pakistan has reached a critical juncture. It desperately needs to rebuild “a functioning nervous system”, the economist has urged — yet no one appears to be paying any attention.

The government remains focused on clinging to power for as long as it can. It has continued to put off the politically difficult, yet desperately needed restructuring of Pakistan’s economy.

The “selfish power grabs” that Dr Mian has criticised for bringing the country to this point only threaten to get worse with the fresh stand-off between the judiciary and legislature.

The question arises: does our power elite really care for Pakistan? Do our judges, politicians, and generals realise that the country is being impoverished as its capital and human resources flee to safer and more stable destinations? It may take decades for the country to recover from the destruction they have caused — that, too, only if the ongoing slide is arrested. When will they be ready to rebuild?

Published in Dawn, April 7th, 2023