Pakistan: Economy and reconciliation

Matters with the IMF continue to be deadlocked and according to a news report, the matter has now been postponed until next month. When the IMF mission that visited Pakistan at the end of January left Pakistan early in the second week of February after completing the round of talks, it was hoped that the staff-level agreement would be finalized soon. The reason for this was that the government did not accept the demands of the IMF and was not meticulous in implementing the conditions.

Meanwhile, the IMF mission left after completing its visit, and Finance Minister Ishaq Dar imposed new taxes worth 170 billion rupees. But a month has passed and the people of Pakistan are facing this additional financial burden, but the negotiations with the IMF could not reach any conclusion. Addressing the Senate the next day, the Federal Minister of Finance revealed that the IMF has now imposed a condition on receiving assurances from the friendly countries on the implementation of their commitments. Although the finance minister did not name any country, it is believed that he was referring to Saudi Arabia, Qatar, United Arab Emirates and China, which have been cooperating in dealing with Pakistan's economic crisis for the past few years.

Pakistan has received two large installments from China during the last one month. On February 25, Cha Sanao Development Bank received $700 million, while last weekend, China Industrial and Commercial Bank received $500 million. This money was returned to Pakistan as a result of the renewal of the loan of one billion and thirty million dollars by ICBC Bank, which Pakistan has already paid; therefore, it is expected to recover another 800 million dollars in this regard; However, by June of this year, Pakistan's foreign exchange needs are estimated at three billion dollars, while four billion dollars of loans will have to be renewed during this time. Time is running out fast but our preparation for these financial arrangements is insufficient. Economic planning requires foresight, but in the toy we have been involved in for years at the national level, it is not surprising that issues of national importance have been neglected and minor issues have become a priority. It is not only the failure to manage the foreign exchange requirements, but every matter which is related to the economy in one way or another, is facing failure to achieve its goals during this period.

There is an example of large-scale industrialization and also of exports. Exports are the major source of foreign exchange earnings and our exports of textiles and overseas labor remittances are the key sources of foreign exchange earnings, but both sectors have experienced a phenomenal decline. In February this year, textile exports were down by 30 percent year-on-year. This is not just a matter of one month, domestic textiles are suffering from the same situation for five consecutive months, mills and factories are closing down and people are unemployed.

Similarly, remittances from abroad are also on the decline and in December last year, remittances from overseas workers remained at the lowest level in nearly three years. When the net source of foreign exchange income is constantly declining, it is obvious that the dependence on loans will increase, but in the political chaos we have been facing for a year, if the international lenders and friends who help in time of need pull their hands. What is surprising in this? There are many justifications for ending political turmoil for the sake of national interest. And the economy is at the top of them, but no branch from anywhere is willing to take the initiative to wave olives.