The neo-colonialists of the modern era are the international lending agencies, which do not need physical presence on a foreign land to occupy a nation. They can now control rise and fall of developing economies from their control rooms in Washington, New York, London, Paris and Geneva. The countries which follow their directions get appreciations which mean they are eligible to apply for more loans and Pakistan is not an exception. The IMF has praised Pakistan for implementing the business, energy and social sector programs laid down by the donor agency to restructure loss-making public enterprises, rein in its budget deficit and build foreign exchange reserves. The financial managers in the country must have thumped their chests over the appreciation form the IMF without giving the commonsense a chance that more loans will add more burdens on the weak economy and depressed nation.
No doubt Pakistan needs energy-sector reforms and business friendly environment to stop capital flight from the country and attract foreign investment. The donor agency has projected the country’s GDP by 4.5 percent during the current fiscal year provided it sustains macroeconomic stability, improves energy supply and low oil prices at the international level continue to adopt downward journey. Pakistan has narrowly missed budget deficit, tax revenue and government borrowing targets during the previous fiscal year and structural challenges are still facing the country. The government is trying its best to comply with the reforms program of the IMF, but economic woes are forcing it to adopt unusual steps without understanding the ground realities. The present stability in the financial sector does not mean the economy has acquired a stable posture as the government steps have stirred the trade and industrial environment of the country. One of which is the imposition of the withholding tax on all bank transactions in case of non-filers.
The government will have to adopt austerity measures beginning from the presidency and the prime minister’s house. There are several loopholes in the government machinery from where the public money is syphoned off and it needs to be stopped. The government must unload the extra burden on the economy and it has to pinpoint the areas of concern to control finance and improve economy. The successive governments in Pakistan have borrowed $ 50 billion from international lending agencies during the last 10 years just for budgetary support. If this is the state of affairs, false hopes and dry promises will never support the economic recovery in the foreseeable future. And it is yet to be ascertained who pays the bill for the IMF talks in Dubai. One fails to understand why talks cannot be held in Karachi or Islamabad.
