God Can’t Save Pakistan From Its Present Predicament, Only IMF Can

By K Raveendran

‘Insha Allah’ is a term used extensively by Arabs and Muslims across the world to mean ‘god willing’. But according to Arabic linguists, Insha Allah means ‘only if god willing’. There is a subtle difference between the two usages, the former denoting a lot more optimism than what may be warranted.

This cannot be truer in the case of Pakistan’s current situation than anything else. Pak finance minister Shaq Dar has now left everything to Allah, saying only He can help. But Dar is quite confident that Allah will rescue Pakistan as it is the only country founded in the name of Islam and Allah is responsible for its development and prosperity!

Addressing the inauguration ceremony of the Green Line Express Train service in Islamabad, the senior Pakistan Muslim League-Nawaz (PML-N) leader said he had full faith that Pakistan would progress because it was created in the name of Islam.”If Allah can create Pakistan then He can also protect, develop, and make it prosper,” Dar said.

The finance minister said the incumbent government inherited a series of problems from the Imran Khan government, during the tenure of which the country and the got destroyed and that Pakistan had the best performing stock market in South Asia during Nawaz Sharif’s time. Dar said the new government was working day and night to bring things under control, but his only hope of help from Allah belies his own credentials as a chartered accountant, with a flourishing career both within and outside the country, apart from his brilliant academic records. In his latest avatar, he is speaking more like a mullah rather than a chartered accountant, for which he has been trolled heavily over the social media.

Pakistan, facing acute balance of payments crisis, is left with less than three weeks’ import cover as its forex reserves have plunged to just $3.6 billion and is desperate for another IMF bailout. Forex reserves have halved in the space of a year, with far-reaching consequences for the economy as a whole. In an expression of the deep-seated crisis, the Pakistani rupee plunged to a historical low of Rs 255.43 against the dollar this week, sliding nearly 10 percent on a single day. This is the largest drop by the currency in over two decades.

Pakistan had secured a $6 billion IMF bailout in 2019, which was topped up with another $1.1 billion in 2022 to help the country following the unprecedented floods. But the IMF suspended disbursements in November due to Pakistan’s failure to make more progress on fiscal consolidation amidst political turmoil in the country. The government relaxed the curbs on the exchange rate as part of its bid to please the IMF, but the easing led to free fall of the currency.

It is widely feared that Pakistan, under heavy external debt, is gradually sinking into a situation similar to Sri Lanka’s as the island country was forced to default on its repayment obligations on its debt, secured on the basis of highly damaging terms, mostly from China, which lent liberally to the country in pursuit of its political and geographical hegemony rather than economic viability of the purposes for which the debt was meant.

While Pakistan has been getting financial support from friendly countries like UAE, China and Saudi Arabia for financial support, its precarious current situation demands that only a bailout package from IMF can help.  Heavily dependent on imports for energy and food, the current account balance has been continuously under pressure as commodity prices kept rising. In a bid to placate the IMF, which is required to extend an emergency line of credit to the country to help tide over the crisis, the government has initiated steps to reform certain areas, including upward revision of electricity tariff as well as retail prices of petroleum products, leading to widespread popular discontent.

Pak economy is controlled by elite politicians, military personnel, civil servants, landed gentry and business and trade organisations, but the current crisis brings no good tidings for these entrenched groups, a fact that will have implications for the ruling party in the coming elections. (IPA Service)

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