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EDITORIAL: COAS (Chief of Army Staff) General Bajwa’s phone call to US Deputy Secretary of State Wendy Sherman kicked up quite a storm; even though he’s been known to lend a hand in the government’s financial diplomacy quite often.

And all arguments that it was not his place to do so notwithstanding, perhaps the one thing that can justify this intervention is the sure knowledge that it would be catastrophic for economy and the country unless the IMF (International Monetary Fund) bailout programme is revived and international borrowing unlocked along with it.

It also goes to show that the situation has deteriorated to such an extent that even the country’s army chief feels compelled to reach out to the people who matter to avert the danger of a default-like situation.

Indeed, the finance ministry and the State Bank of Pakistan (SBP) are doing what they can to calm nerves, but when the country needs to cough up more than $40 billion in debt servicing in a single fiscal year, while it is bending over backwards for a mere $1.4 billion, it’s no longer possible to just talk up the market, so to speak, like the old days. It is also very clear that the market will remain shaky, and the rupee will not be able to find its feet till the staff-level agreement is followed by the money actually arriving in the central bank’s vaults.

Also, it’s not just the COAS that’s been making phone calls to Washington. Pretty much everyone in government has been stepping beyond the formal protocol of dealing with the Fund to try and get the American government to exert some influence. And that is also quite natural. Because nobody’s yet explained the delay.

The IMF must, at least, explain the reasons for its silence; especially since the government has met all its harsh prior conditions, and burnt precious political capital for it and paid heavily in the by-elections. It’s also causing a lot of uncertainty, which is the primary reason for all the haemorrhaging in financial markets. How long must Pakistan’s households and businesses suffer because the lender of last resort is taking too long to honour its own commitments?

What, after all, could possibly be left for it to consider? And what does one now say to conspiracy theorists who are always putting two and two together about how the West is using its tools and toys to undermine Pakistan? It’s another thing altogether that the country’s political elite will not let even the collapsing economy, and the desperate need to save it, come in the way of spewing venom on each other; muddying the waters even more.

Perhaps they should stop to think that nobody else would have ever had to step in to try to push things along if they, the politicians, had at least the good sense to come to some sort of an understanding about rescuing the economy in these very fragile times.

But that would’ve meant putting their political differences aside for a while, which in turn would’ve meant no point scoring; and that’s clearly unacceptable to the people that so desperately want to run this country, even if it can make a big difference in everybody’s survival.

The simple fact of the matter is that the country needs to borrow a lot of money to stay solvent in the near- to medium-term. And the trickle that will come from the Fund will open the floodgates to a lot more from other institutions as well as sovereigns.

Even a number of very friendly, and usually very reliable, countries have now associated any further lending to Pakistan with the resumption of the EFF (Extended Fund Facility). Therefore, anything or anybody that can help get that money as soon as possible ought to be appreciated, not ridiculed.

There will be plenty of time to properly define everybody’s roles, and set them in stone, once we’ve weathered the storm. Till then we need all the help we can get.

Copyright Business Recorder, 2022


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