Need to Recalibrate Economic Road Map


Malik M. Ashraf

It was a well-deliberated ploy to create difficulties for the coming government as according to Imran Khan, he was aware of the move for no-confidence about five months before it happened

To say that Pakistan is facing the worst ever economic melt-down would be an understatement. It is at the brink of the economic precipice which if not confronted and rectified with decisions dictated by the ground realities— without caring for the political cost— the country could plunge into a never-ending economic nightmare. The irrefutable reality is that the permeating situation is a sequel to unimaginative economic policies of successive regimes including the outgoing PTI government which aggravated the already formidable economic position through its unprecedented borrowing and refraining from taking honest and realistic decisions to fix the economic maladies. Its emphasis on populist projects in the social domain and avoiding the implementation of its accord with IMF in regards to terms of the agreement prescribing removal of subsidies added to the gravity of the situation, though it provided temporary relief to the people.
It was a well-deliberated ploy to create difficulties for the coming government as according to Imran Khan, he was aware of the move for no-confidence against him about five months before it happened. The PDM government was left with no choice other than fulfilling the commitments with IMF to avoid default and getting the vitally needed seventh tranche. The people have been undoubtedly hit hard by the removal of subsidies on oil and electricity. It has not been an easy decision by the government to take harsh and realistic decisions at some political cost. But in the prevailing circumstance and keeping in view the future viability of sustained economic growth, it is a correct decision.
The situation demands national consensus on the future economic roadmap and collective responsibility. It is not the time for playing politics for narrow political gains at the expense of long-term national interests. Would the politicians on both sides of the divide wake up to the harsh realities and engage in a dialogue to recalibrate the economic road map for Pakistan? Would they sort out other contentious issues having a debilitating impact with regard to socio-economic development and strengthening democracy in the country?
There is no other way to ward off the dangers lurking on the horizon. Elections and changes in government at this juncture are not going to resolve the issues confronting the nation. There is also no magic wand available to fix the challenges. Unfortunately, miracles also do not happen. In times of adversity, only collective and honest efforts by all stakeholders are imperative to winch the country out of the quagmire it is stuck into. Who will play the role of a facilitator to make that happen remains a million-dollar question?
Amidst this dismal and suffocating economic scenario, the nod by FATF to remove Pakistan from the grey list in recognition of it having fulfilled and implemented all the actions plans in regards to anti-money laundering and combating terrorist financing is surely a whiff of fresh air which can help to remove the economy from the ventilator. A technical team of IMF will visit Pakistan to validate the process of the implementation of the reforms carried out by Pakistan in this regard and a formal decision will be an announcement in its plenary session in coming October. It will help in boosting direct foreign investment in Pakistan and restore the confidence of the international money lending institutions in the viability and sustainability of Pakistan’s economy besides fixing other economic aberrations. It will also assist in the achievement of Pakistan’s strategic objective of strengthening the economy and improving its integration with the international financial system.
Pakistan since 2018 when it was put on the grey list of FATF has made strenuous administrative besides carrying out legal reforms to meet the demands of FATF and to qualify for her exit from that infamous categorization. The credit surely goes to all the state institutions for their unrelenting efforts in wriggling out of the situation, more so the special monitoring cell established at GHQ in regards to money laundering and terrorist financing. The COAS rightly claimed the credit for facilitating this process and safeguarding national interests. Hopefully, the October plenary of FATF would clear the decks for putting Pakistan on the white list.
It was indeed a herculean effort by Pakistan because its inclusion in the grey list of FATF also had political dimensions. Pakistan was put on the grey list as a result of a motion by the US, supported by its allies who have been giving it a really tough time to Pakistan during all these years, supplemented by efforts by India to have it relegated to the black list. India was the chairman of the Asia-Pacific Group of FATF which was tasked to handle the issue. Pakistan must also be thankful for the friendly countries like China, Turkey and Malaysia which stood on her side to prevent its relegation to the black list.
FATF has 39 members. A country needs at least 12 votes to get out of the grey list and a minimum of three to avoid relegation to the grey list. The issue is more political than entirely about money laundering and terror financing. Putting Pakistan on the grey list was a political move by the US to put pressure on her about the situation in Afghanistan. The decision by FATF decision besides its economic benefits also represents a turn in the political tide at the global level as far as Pakistan is concerned; signifying yet another positive development.
It is indeed a national triumph and must be taken as such. Now is the time to capitalize on this positive development and give the desired direction to the economy, dictated by the ground realities rather than continuing with the traditional mindset of reaping political gains with ephemeral impact. Playing politics at this critical juncture could bring further disaster to the country. Those thinking in terms of reaping political gains against their opponents must give serious thought to the fact that it could ultimately lead to their doom and destruction. Nation and state come first and the rest has secondary importance.