Finance Minister Shaukat Tarin sounded upbeat after talking to IMF officials to soften up their calls for stringent measures by Pakistan to fully stabilize its economy before it treads on the growth path.
He hinted that IMF has shown “flexibility” and supported his plan of action to stimulate growth without resorting to tough measures.
IMF spokesman Gerry Rice, in his press conference through video link, was not as unequivocal and forthcoming as Tarin but maintained that the international lending agency stands ready to continue to support Pakistan as to achieving debt sustainability and high and sustainable growth.
"We welcome the open, constructive discussions we’re having with the Pakistani authorities," Rice said at his press conference.
Speaking in general terms, Rice emphasized the need for Pakistan to pursue sustainable fiscal path and structural reforms, particularly in the taxation and energy sectors.
It seems both sides may agree on a middle ground to continue with the programme's sixth and seventh reviews of which are now to take place in September.
But many observers believe that the IMF support for such programmes is not as simplistic as generally believed and it is linked to the geopolitical developments taking place in the region.
They back up their argument by referring, for example, to the recent decision of the Paris-based Financial Action Task Force (FATF) to keep Pakistan on its so-called grey list despite fulfillment by Islamabad of the 26 out of 27 targets set for it to curb terror financing and money laundering.
It is widely suspected that such controversial decisions are appeared aimed at extracting maximum support from the concerned countries in achieving the geopolitical objectives of the major powers particularly the United States.
Foreign Minister Shah Mehmud Qureshi said there was no justification for Pakistan to be kept on the grey list. “It needed to be looked into whether FATF was being used for technical purposes.” “Some powers desire to keep the sword of FATF hanging over Pakistan,” he said without elaborating.
“It has yet to be determined whether the FATF is a technical forum or a political one,” Shah said.
The US-led international forces plan to pullout from Afghanistan after two decades of war, the longest American war in history on a foreign land.
Many observers suspect that the FATF decision might be aimed at keeping Pakistan under pressure to extract its maximum support in facilitating a smooth withdrawal of US troops from Afghanistan after their longest war on an alien country.
The US drawdown has resulted in stunning gains by the Taliban in Afghanistan raising fears among the neighboring countries that the Islamist militia would once again take control of Kabul and much of the war-ravaged country. Any such prospect would rekindle security fears not just for Afghanistan’s neighbors but for the entire world.
US administration would expect Pakistan to use its leverage with the Taliban to discourage them from taking over Afghanistan though all signs indicate the repeat of the 1990s situation in the ill-fated country.
Pakistan has assured its full support for US pullout but has unequivocally ruled out possibility of leasing any of its military bases for the US forces to conduct post-withdrawal military actions inside Afghanistan from its soil.
It is feared that as happened before the rise of the Taliban in Afghanistan would be blamed on Pakistan and the US is unlikely to admit its repeated mistake to wash its hands off Afghan war without evolving a political deal among the warring factions to avoid a civil war.
In such an eventually, the US might use its influence in the powerful financial institutions like IMF to exert pressure on Pakistan.
Cynics refer to the US attitude towards Pakistan in the late 1980s and 1990s when after Soviet withdrawal from Afghanistan, Washington imposed punitive sanctions on Pakistan for its nuclear programme. hey suspect that India might also join hands with the United States in this regard.
Presently, the economic indicators are very good and Pakistan’s economy is not facing any immediate challenge but in the medium to long terms it could face multiple challenges.
The coming months and years, therefore, could be more challenging for Pakistan and the leadership has to take very important decisions which have far-reaching impact on its economy and its security. Such situation requires a national cohesion to confront these challenges.
The policy makers, therefore, should stop taking fire-fighting measures as these could not get the economy out of its deep-rooted mess and they have to evolve a home-grown strategy to address these problems on a permanent basis.
If history is any guide then Pakistani leaders have been supportive of the international geopolitical strategies, generally dubbed as Great Games, for short term gains but have never used such opportunities to get country’s long-running problems resolved.
The present government has repeatedly boasted of shifting its focus from geopolitics to geo-economics but so far it has not come up with a workable plan of action to show its seriousness in this regard.
Geographically, Pakistan is undoubtedly placed in an ideal position but geo-strategically it is confronted with enormous challenges which need to be addressed in an innovative way. Pakistan has a long running history of rivalry with India in the east while its western neighbor Afghanistan has been in a state of war for over four decades while its another bordering country, Iran, has been at the loggerheads with the west.
Pakistan enjoys excellent relations with its only neighbor China and has been the first country to host China Pakistan Economic Corridor, the flagship project of its gigantic Belt and Road Initiative (BRI). But the full potential of this project could only be exploited only in an environment of peace and stability in the region.
Pakistan, therefore, has to take bold initiatives first at the home front by putting its own house in order. It requires policy makers to evolve a national consensus on a strategy to resolve the long-running problems afflicting the country without politicising them for petty gains and then taking steps to alleviate tensions in the region and improve economic relations with neighbors and regional countries.
It is the only way for the policy makers to put Pakistan on the path to economic development and progress.
The writer is a senior journalist based in Islamabad