Convergence inevitable but who is winning?

By Muzzammil Aslam

PTI policy makers have not distracted from its policy set, yet to please any segment belongs to businesses, internal government, bureaucracy, bilateral partners or international multilateral agencies (including IMF).

The mounting pressure of growth slowdown, higher price level, lower taxation, and social unrest have not deterred its attention towards temporary or short-term policy making.

Unlike past, Populist decision making is not any more core of policy making. But at the same time it tanked pressure from bilateral partners and multilateral agencies of implementing policies of their choice if it’s clearly not in the interest of public or country in general.

The above can be visible from government persistent negotiation with IMF. The government has had officially requested IMF fresh program in November (5 months back) and presented its economic plan to IMF, while refused to accept the preconditions in part which are not in the interest of country.

Irrespectively, it crack the tough decisions of aggressive devaluation & monetary tightening. Electricity & gas price through and higher regulatory duties to curb imports. Simultaneously, ease duties on raw material, rationalise the energy tariffs, progressively managing the liquidity issue through refunds of exporters.

Intermittently, Government has decided to go for “stop-gap” bilateral arrangements with friendly countries in one go and managed to pull funds which was no one expecting without the backing of IMF. Altogether $12bn funds arranged to ensure to bridge the financing gap.

To bring economy to long-term sustained path, it is very important to deal with imbalance of 1) external sector, 2) fiscal side , 3) AML & tax compliance.

With the Policies mentioned above, the government has already strike some success, in the shape of declining trade deficit & in turn Current Account Deficit. Efforts are underway to minimise the losses of PSEs & power companies.

Moreover, clampdown to discourage money laundering, white-collar crime and terrorism funding has widely hailed Pakistan efforts by FATF.

Both FATF & IMF staff are likely to visit Pakistan  from 25th March and finalise their report card.

Already Finance Minister have hinted for convergence of IMF & Government view point and expected kickoff of the program any time soon from now. The FATF dropdown from grey list likely in May review at Paris.

The opinions in this article are the author’s and do not necessarily represent the views of Mettis Link News (MLN).

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