Fiscal independence always leads to political independence, but vicious web of loans has not only plunged the country into financial quagmire, but also staked its political independence. The country had rid itself of the International Monetary Fund during Musharraf regime, but the present government again opted for a $6.7 billion loan under a three-year extended facility programme. The makeshift arrangement has apparently repaired the sagging economy, but left long-term effects spanning over years to come. The country has already reached a breaking point to get more loans in the absence of a real economic growth and another package with the donor agency will bring more harm for the financial discipline than any good. There is no denying the fact that corruption, perks, kickbacks and other anomalies are eroding the economic gains and the recently published reports in the form of Panama leaks should be the eye-opener for the nation. Instead of starting a blame game, the political elite should have found grey areas to extend cooperation with each other and resolve the economic mess.
Under the head of fiscal discipline, the government has curtailed budget deficit, ensured a growth rate of 4.5 percent to its gross domestic product and stabilized the economy. However, it is not difficult to understand that the stability has been achieved through the crutches of loans and its effects will continue to haunt the national economy even if the government does not opt for another loan programme from the IMF. Without streamlining the industrial sector, improving the tax collection system and lack of capacity to adopt austerity measures, the economy will continue to show bleak performance. The tall claims of the government that it has achieved fiscal discipline and the paid advertisements in the media depicting rosy picture of the economy will not change the factual situation. The government will have to toe the lines of the alleged IMF dictations not only to return the loan, but also piling up the ensuing markups.
Industrial and business sectors are crucial for economic growth and are needed to be strengthened. The government policymakers must ask a question to themselves: Why Pakistan cannot be made investment friendly country. The countries in the region are making progress with leaps and bounds, but we are still directionless not knowing what exactly we want to do and where we want to go. The list of exportable items, which mostly consist of raw material and edibles, needs to be revised. Thrust should be giving to the value added goods and the export of only surplus edibles should be allowed. The people of this country are made to buy expensive food items at home which are exported on throwaway prices abroad.
