Government extracted the much-needed financial support from close friend, Saudi Arabia last month, and is now waiting for the Kingdom to credit the first installment of one billion dollars from the total $3 billion of the pledged assistance to its kitty.
The country would also receive oil on deferred payment of up to three billion dollars through the year from the oil rich country.
A government team led by Foreign Secretary Tehmina Janjua, which included Governor of the State Bank of Pakistan and Finance Secretary, also met with the Chinese officials in Beijing last week in a follow-up to the Prime Minister Imran Khan’s visit to China to finalize a financial package from the Chinese friends.
The size of the proposed package has yet to be disclosed but Finance Minister Asad Umar on return from China visit triumphantly announced that the immediate balance of payment crisis for the country is over.
And on the top of all this assistance, the government is negotiating a bailout package with the International Monetary Fund, which once approved would be seen as a green signal for the world’s financial agencies to do business with Pakistan.
While all these efforts are commendable but these endeavors would go in vain if government did not put in place the much-delayed reform package to address the deep rooted economic woes of the country.
Many economic experts have expressed apprehensions that the measures announced by the government so far are not enough to effectively tackle the economic challenges faced by the country.
The current account deficit has shown a downward trend in recent months because of increase in the foreign remittances and an upward trend in exports but the deficit is still very high.
The government leaders hope that the announced incentives so far would help double the exports in the coming months but observers have cast doubt over this optimism by saying that in view of the tough competition with the regional countries like Bangladesh and India as well as absence of serious efforts for value-addition it is hard to expect any significant raise in exports.
Restructuring or privatization of sick and loss-making public entities is another big challenge for the government.
The previous government, despite having comfortable majority in the parliament, could not push its ambitious privatization program and failed to achieve any progress in this regard.
The present government has ruled out possibilities of selling loss-making entities and is aiming to turn them into profiting-making entities through restructuring as it is planning to do in case of the Pakistan International Airlines but such efforts would stay under intense scrutiny from the IMF during the course of its proposed bailout program.
For long, the donor agencies as well as international financial institutions have been pressing Pakistan to introduce much-needed tax reforms and broaden its tax base.
Though the tax to GDP ratio increased from the dismal 8 percent to 13 percent over the past decade or so but it is still very low. Moreover, this increase has mainly been achieved through squeezing of the already heavily taxed people of the country – the salaried class – but not enough efforts were made to make filthy rich people of the country to pay their taxes honestly.
The affluent people have taken benefit of the lacunas in the tax laws and have been paying very little tax as compared to their income but time has come for the government to bring them effectively into the tax net.
The long-delayed reforms in the energy sector also need to be expedited to lessen burden on the national kitty.
At the time when government is holding talks with the IMF, the circular debt is estimated to have crossed the 1.2 trillion rupees mark.
After coming into power, the PML-N government paid off 480 billion rupees in one go in circular debt and had vowed it would not let it to pile up but it failed to keep its promise.
The present government so far has played up failures of the previous government on such matters but has yet to announce an effective policy and take practical measures to ensure that previous mistakes would not be repeated.
The massive pilferage and corruption in the energy sector need to be plugged so that this vital sector is run efficiently.
In Pakistan, unfortunately, vital national issues like economy have always been made hostage to political matters.
It is high time for the government to meaningfully engage opposition parties to get their support in doing legislation which is vital in addressing economic issues of the country.
The parliamentary leaders of the government and opposition in the National Assembly recently agreed to bring down political temperatures by discouraging mud-slinging at each other.
Such attitude would help create an enabling environment for the parliament to focus its attention in tackling the real issues faced by the country.
Prime Minister Khan as well as Finance Minister Umer are required to take regularly parliament into confidence about their economic policies which could draw a cooperative response from the opposition parties.
Our leaders must realize that too much dependence on foreign help, even from friends, not just hurts national prestige but also cause fatigue among donors.
While China has always been helpful in mitigating economic woes of Pakistan but privately has been asking its leaders to take homegrown measures to address their problems.
Our Western allies have already pronounced it publically that they could no longer burden their own people to foot Pakistani bills and Islamabad needs to tax its own rich people to bear its own expenses.
Moreover, foreign assistance does not come without a price. In the wake of geopolitical developing taking place all around the region and world, a country runs risk of endangering its vital interests by agreeing to terms and conditions of a foreign loan.
Finance Minister has repeatedly held out assurances that Pakistan would get foreign assistance without compromising on its national interests but such commitments are easy said than done.
Pakistani leadership and all stakeholders need to evolve a broad consensus over a strategy to deal with the grave challenges faced by the country. Economy must figure high in the priority list of such challenges.
The writer is a senior journalist based in Islamabad