Pakistan’s current financial crisis is worsening with each passing day and its backfiring the element of realization more stronger that the only option they have it to comply with the tough pre-conditions of the International Monetary Fund (IMF) to revive the bailout programme.
But it would come with a damaging political cost, which the already weak Pakistan Democratic Movement (PDM) coalition government, does not want to opt for.
Prime Minister Sharif on Wednesday withheld the final approval of a set of measures, which were recommended by the Finance Ministry, to be implemented to revive the IMF programme.
He asked the relevant authorities to work on means and ways to slightly sweeten the bitter pills of inflation, which will put furthermore pressure on the already difficult financial condition of the masses.
The premier directed concerned authorities to look into some possible relaxations in the increase in energy prices and taxes, will be put forward to the parliament for legislation and approval through a mini-budget.
Moreover, Sharif is also directing members to find ways to decrease the political fallout of the tough economic decisions as the current government cannot afford more political damage, which later might become a capitalizing point for their opponent Imran Khan to criticize them, and would also become a difficult narrative for all coalition government political parties to attract votes during this year’s general elections.
However, cabinet members and key bureaucrats were strongly of the view that Pakistan is left with no other option but to opt to the tough pre-conditions of the IMF, emphasising that certain decisions, which will be politically unpopular, will have to be taken.
It was also highlighted that Pakistan will have to let the rupee reach closer to the open market rate and also will have to impose a significant increase in tariffs, taxes and fuel prices, in order to convince the IMF and have the delayed tranche and review of the bailout programme, revived and released.
However, this will certainly further worsen the political capital and will burden the people, a bitter pill that will have to be swallowed as all members agreed that IMF was the only option left for Pakistan.
“The current economic crisis is not of the making of the present government but it has to deal with it and that must be appreciated,” said one of the members of the important cabinet meeting chaired virtually by the Prime Minister.
Pakistan’s economic situation has gone from bad to worse to grave within days as its foreign reserves have fallen down to only $4.4 billion, which is also a breach of the IMF’s limit to restrict the forward swaps by the central bank to $4 billion by the end of December.
Pakistan’s stock market has also responded with a steep dive as it lost about 3,000 points on Tuesday trading day with market not trusting the current volatile financial, political and economic situation in the country.
Additionally, the country’s bad credit ratings and uncertain economic standing has also brought the IMF and the World Bank (WB) to a conclusion that it could not give any new loans to Islamabad without first ensuring sustained policies for macroeconomics stability.
–IANS
Comments are closed.