Controversy amid chaos

This week’s public criticism by Deputy Prime Minister Ishaq Dar targeting the International Monetary Fund’s intentions towards Pakistan exposed the disastrous course taken by part of the ruling structure as the country battles the worst economic challenge in the nation’s history.

Dar, known for locking horns with the IMF during his previous tenure as finance minister, has a history of taking on the lender on items unrelated to the relevant. Though named as foreign minister and subsequently the deputy prime minister, Dar has periodically shown more than an active interest in his former cabinet portfolio.

In his latest faux pas [and it is a faux pas] during a Defence Day event in the UK, Dar reportedly questioned the IMF’s intentions towards Pakistan, and presented details of how the Fund had stalled its financing to the country over eight months when he served as finance minister.

At the very last minute during that tenure, the IMF agreed to a short term loan of $3 billion to help Pakistan tide over a looming default on its foreign payments. If anyone deserves credit for that last minute bailout just last year, it must be Prime Minister Shehbaz Sharif who personally intervened to save the day.

Tragically, Dar’s public remarks in the UK have badly exposed the latest set of troubles surrounding Pakistan’s ongoing relationship with the IMF. For weeks, reports have widely circulated over a delay in the successful conclusion of Pakistan’s request to the IMF for a $7 billion bailout for the next three years.

Already dubbed as a chronic IMF borrower with 24 loans taken from the IMF in the past, Pakistan’s history with the fund has little to show for a significant success story. A repeated failure over time to fix the country’s internal finances and its external position, has led to arming Pakistan with its worst financial outlook in the nation’s history.

The latest delay in the IMF coming through with a final agreement, according to reports in Pakistan and from Washington, has principally been driven by Islamabad’s failure to secure adequate foreign resources to balance its books. But in playing to the gallery, Dar chose to ignore a gaping hole in Pakistan’s case presented to the IMF.

Meanwhile, Pakistan’s political troubles ranging from the controversy surrounding the outcome of this year’s elections to continuing and blatant insecurity in Balochistan and elsewhere, hardly helps to reinforce confidence in the economy. For investors – internal and external – the thought of taking stakes in a country surrounded by such troubles must be unsettling.

Meanwhile, Pakistan’s present economic and financial direction is hardly inspiring. The broad reaction to this year’s annual budget has only reinforced the popular view that Pakistan is in the grip of a terrible ‘elite capture’.

While the country’s burden of taxes and revenue collection falls on a narrow community, there is a large community of fat cows elsewhere left immune from paying their dues. For the sake of Pakistan’s future, this must change. And public spending must be reined in.

Almost four years later, the profound challenges faced by Pakistan on its domestic and external fronts, raise troubling questions over those holding charge of the country. As troubles mount between Pakistan and the IMF, did Ishaq Dar embrace a wise choice this week in targeting the lender?

The writer is an Islamabad-based journalist who writes on political and economic affairs. He can be reached at: farhanbokhari@gmail.com