Nuclear fusion technology, goes the joke, is always twenty years away. The same seems to be the case with the government reaching a staff level agreement with the International Monetary Fund: it’s always five days away. Ever since the crunch started being felt in the current government, we are on our nth iteration of “five days away.”
As things stand now, international credit circles are abound with apprehensions about Pakistan pausing its debt repayments if it does not secure an arrangement with the IMF soon enough.
It’s been a slow dance, the one with the IMF. The Fund is adamant about certain conditions of it being met. It’s twice shy, having been burnt not just by follies like the last government’s petroleum subsidy, but also by the current dispensations rather confusing behaviour regarding subsidies, which includes the government’s widely-criticised desire to give a Rs 150 billion subsidy for motorcyclists.
Despite some confusion, Pakistan has, in fact, held up its own end in certain regards. For instance, the rupee’s slide against the dollar was steep and sharp, electricity prices have increased, fuel prices in general have been increased and there have been increases in tax revenue as well. All this has contributed to the record high inflation rate, of course, but so far its been a bitter pill that has no medicine, as the standoff with the IMF continues.
The most depressing aspect of this entanglement is it’s Sisyphean nature. Even if we were to ensure a program with the IMF, the government would merely be kicking the can a little further down the road. We are in dire need for basic structural reforms in order to achieve sustainable results, which would get us out of this rut we end up in every couple of years.