Pakistan’s reckless course?

With barely a fortnight left till end of Pakistan’s financial year, the country’s disruptive politics and wild economic trends together raise the specter of just one exceptionally dangerous outcome – that of a journey towards a reckless future without precedence.

On Thursday, finance minister Ishaq Dar came out with his typical bluster following the IMF’s criticism of last week’s controversial budget, roundly challenging the lender’s assertion. Without referring to the questions posed by the IMF, Dar sought to tie the matter to undefined ‘Geo-politics’-a very dangerous reference suggesting a concerted push to target Pakistan’s strategic muscle. As Pakistan deals with multiple economic pitfalls, its vital for the country’s policy makers to confine the discussion only to economic parameters rather than broadening it out to other areas.

On Friday, just a day after the IMF’s criticism, Dar’s response became visibly muted as the government offered ‘flexibility’ while claiming to be “keenly engaged with the IMF to reach an amicable solution”. Meanwhile in yet another futile endeavor on the same day, the ruling Pakistan Muslim League-Nawaz held its ‘token’ intra-party elections, with the outcome a foregone conclusion even before the day began. Ironically, the return of the same leaders to lead the PML-N will hardly make a difference to the future of Pakistan.

As evident from a series of mishaps in recent times during Pakistan’s political and economic journey, the country’s outlook is in danger of being set for a crashing outcome. Irrespective of how long prime minister Shehbaz Sharif’s led ruling structure remains in place, the bigger casualty is set to be a widely disarrayed outlook for the future of Pakistan. And notwithstanding the unending official pat on the back repeatedly driven by a ‘sub achha’ or all is well mantra, the future of the country remains deeply uncertain.

Exactly when the next national elections are held remains surrounded with uncertainty. But the economic trajectory on its present course sadly offers more certainty than ever before. In a nutshell, it would be safe to conclude that the future will likely become more tragic than Pakistan’s past.

With Pakistan’s foreign reserves remaining in dangerous terrain, the real life danger of a default on the country’s foreign debt repayments lurks close by. Without a comprehensive IMF led international bailout, Pakistan’s foreign exchange coffers are in danger of drying out in the coming months.

As such dangerous trends mount on the external front, the choice by Shell international to leave Pakistan following a long term presence, indicates the nervousness among the few remaining foreign investors left in the country. This followed similar setbacks notably the decision by Telenor Pakistan to sell out its operations and the choice by Virgin Atlantic airlines to cancel its Pakistan operations.

Fundamentally, the failure of the proverbial ‘Darnomics’ is led by three inter-related holes.

First, Pakistan can not afford to play politics with its economy the way it has been spelt out in a series of events including the budget just last week. The idea of offering populist sops in tandem with offering a convincing budget to the IMF will just not work. With or without an upcoming election campaign and its pressure upon the government to sugar coat a belt tightening driven bitter pill, Pakistan’s future can just not be left to the whims of any political interest. Its clear that significant parts of the budget will have to be radically altered if Pakistan seeks a bail out to avoid a default.

Second, Dar’s repeated public outbursts against the IMF not only smack of a failure to muster enough seriousness to manage a dangerously challenged economy. They have already complicated a resumption of the long delayed IMF loan. With just a very narrow window of opportunity left till end of this month, it would be nothing short of a miracle coupled with a fundamental retreat on policies by Pakistan, if the long delayed 9th review of the IMF is completed. And more vitally, it would be in Pakistan’s best interest if Dar remains restrained in public from launching attacks on the IMF as he has done more than once in the past.

And finally, a reality check is essential to carve out a comprehensive strategy for Pakistan to return from the brink of economically going over the cliff. For long, Pakistan’s successive governments have spent far more than they could afford. A swift and bold return from a further recurrence of a ‘spend, spend, spend’ model requires sacrificing long held sacred cows, all in the interest of stabilizing Pakistan.

For long, the Pakistan International Airline (PIA) commonly dubbed as ‘Perhaps It’ll Arrive’ and many other public sector companies have been kept in the ownership of an increasingly sinking state. And for long, the burden of taxes has been borne by communities of the already burdened mainstream population of Pakistan. Eventually, tackling these powerful realities will be vital to carve out a new Pakistan, one that ensures a safe exit from a reckless future.

The write is a senior journalist based in Islamabad