- But still no clarity
So now, once again, there’s no need to go to the IMF anytime soon. That is how the finance minister feels after giving every indication that the government is, indeed, gearing up for and IMF bailout loan. But there was the odd news in the press, naming anonymous sources admittedly, that the IMF demanded a bit too much in terms of revenue, which is what may have irked the finance minister temporarily. Why not feed the media the ‘no need’ bit again while they figure this one out? Plus it puts the spotlight back on the friendly loans, which the government refuses to break down but still appears confident that they will avert an immediate default.
But what’s this other bit of news about another mini budget around the corner? Is the government really planning, among other things, to roll back the tax-filer condition on real estate and automobile purchase? Sure, that would rub the industry the right way, but what about the promise, not to mention the urgency, of expanding the tax base by hook or by crook? The finance minister makes the same generic statements, which quite smartly waltz around anything quantifiable, whenever he talks to Pakistani electronic media or the foreign press. But he never really explains just how much money we really need in the immediate term and just how much of it has been secured. And how much time do we have to bag the rest?
And this is precisely the point. Imran Khan and Asad Umer might have noticed Moody and Fitch downgrades late last week, despite their repeated assurances that all is well. Now you can write them off all you want, but the sad fact is that the foreign investor, which we so prize at the moment, takes his cue from just such rating agencies. It’s not, once again, what the government is doing to stabilise the economy, it’s how it is doing it. Squeesing the life out of the equity market and the rupee, jacking up the discount rate to the point of choking all prospects of expansion, and yet denying IMF influence, just does not inspire confidence among those whose money Pakistan’s economy needs. If only the government would be more transparent, things would be far better.