THE perseverance of the past govern-ment brought back the International Monetary Fund (IMF) into the equation that provided the relief the country needed to stave off the threat of default. The IMF’s conditions are strict which highlights the general lack of trust in the Pakistani governments.
These conditions often lead to unpopular economic policies that may cause suffering and hamper growth. Pakistan borrows from the IMF to repay project loans due to its inability to generate enough foreign exchange. Unfortunately, these loans have not translated into significant development, as they often get misused by the ruling elite.
Despite the onerous terms, the government seeks IMF assistance as it provides better terms than the international money market. Lenders are hesitant to provide loans to a country on the brink of default, leading to prohibi- tively high interest rates.
The concept of a ‘charter of economy’, as such, seems to be the need of the hour, as all major political parties have dealt with the IMF and have no significantly different economic policies. The charter should aim at bringing continuity to economic policies. It will require commitment from all parties to foster collaboration.
The IMF identifies structural reforms that often remain unimplemented because of the fear of mass criticism. The charter of economy could address this issue and ensure that essential reforms are implemented.
Pakistan’s reliance on the IMF highlights the need for long-term economic reforms. The proposed charter of economy, which will involve all major parties and the establishment, may provide the necessary continuity and prevent political exploitation of economic policies.
It is essential for us to move beyond short-term fixes, and focus on sustainable development to uplift the national economy.
Mujeeb Ai Samo
Larkana
Published in Dawn, August 18th, 2023
