On Wednesday, Finance Minister Asad Umar made an appearance on the BBC talk show HardTalk. While there is little doubt that Umar did not shy away in the face of serious questions, there was little about his answers that could allay the cloud of fear that has surrounded the Pakistani economy under the PTI’s stewardship. What can be said about the irony of the claim that the greatest achievements of this government in the promised 100 days were to ‘increase gas prices, increase electricity prices, increase taxes, increase the interest rate, and devalue the currency.’ It is hard to imagine another finance minister in Pakistan’s history who has read off this fairly grim state of affairs with such self-assurance. The real question is whether Umar’s self-assurance is in reality hubris. The PTI has taken a simple line since it has come into power: it has had to make hard choices. One can certainly sympathise with the need to make choices that are tough, but there appears to be a mistaken sense in which the government appears to be looking with pride at choices that have serious short and long-term consequences for the country’s economic future that is causing doubts.
There is a difference between the necessary decision and the right decision. Perhaps, Pakistan’s economy is in a situation where economic decision-making can only be to make the necessary choices – but these cannot be presented as the right decisions. This is not the line that the PTI government is taking. The finance minister went out of his way to insist that the Pakistan government too believes in exactly what the IMF thinks is necessary in the country. We have already warned that the government needs to be far more sceptical of the kind of imported economic dogmas advocated by the IMF.
Effectively, Asad Umar’s media appearance leads us to ask two questions that were not sufficiently addressed. One, is getting bailouts a solution to the economic crisis in the country? Two, will the government’s approach to the economy work? The trouble is that Prime Minister Imran Khan was right when he promised he would never take international loans. Debt needs to be repaid – but the problem with Pakistan’s external debt is that it only piles on and on. The PML-N’s Ishaq Dar made the same promise that Asad Umar is making today: Pakistan will never need a bailout again. Both followed the same policy dogma, dictated by Pakistan’s strictest creditor, the IMF. It is clear that Dar was unable to deliver on his promise. There is reason to worry that Umar will meet the same fate.