- Energies must not be fittered away
That the covid-19 pandemic has caused the world’s economy to go into a tailspin needs no confirmation, but the International Monetary Fund (IMF) provided it anyway, in its latest World Outlook report, released on Wednesday. If anything, the report showed the IMF, through its downgrades of its growth estimates for all countries, as seeing the crisis grow worse for all countries. Pakistan is among those countries, which is particularly noteworthy because the IMF has got an ongoing Extended Funding Facility programme with Pakistan. It was positive that it revised its April forecast of -1.5 percent for the 2019-2020 to 0.4 percent, but it also revised its estimate for the fiscal year just begun (2020-2021) from 2.0 percent down to 1.0 percent.
The picture is hardly edifying, as if the population growth of 2 percent (itself unbearably high) is adjusted for, instead of being positive, per capita incomes will actually shrink. The high hopes that the PTI (Pakistan Tehreek-e-Insaf) held out, that its excellent management and anti-corruption campaign would create jobs, have been sacrificed at the altar of the pandemic; for the IMF estimates are of growth anemic even by the standards of a developed economy, let alone a developing economy with a burgeoning population. True, Pakistan is no exception, and the problems it faces are common to all economies, but what is more of a problem is that Pakistan has only obtained a deferral of its foreign debt repayments, which will fall due by the next fiscal year. With the world economy stuttering, major economies may take refuge behind protectionist walls, which will bode ill for economies like Pakistan, which will face a foreign-exchange crisis like never before.
It is not that Prime Minister Imran Khan pays no attention to the economy, but the kind of attention he pays reveals a worrying lack of ability to prioritise. He had a meeting with the gemstone industry, in which he expressed the hope that this industry could generate both jobs and export earnings. This industry has been around since at least the times of Alexander the Great, but has never developed into an economic powerhouse. It is as if the PM grants a meeting to any lobby that has his ear (witness the re-opening of the construction industry), rather than because of any economic potential.
