This is apropos a Business Recorder op-ed “Budgetary outcome in 1HFY21” carried by the newspaper last week. The writer, Dr. Hafiz A. Pasha, has argued, among other things, that “The question is if the budgetary process in the first six months of 2020-21 is consistent with the achievement of annual targets mentioned above? If so, there will be less pressure to either raise taxes or cut expenditure as Pakistan re-enters the IMF Programme.”

In my view, however, the IMF is not adamant per se in relation to implementation of the terms of its agreement on the $6 billion loan package with the government of Pakistan. It has been showing a lot of flexibility since the breakout of Covid-19 in particular. The greatest example of its soft approach to Pakistan appears to be its acquiescence to a so-called historic deal between government and Independent Power Producers (IPPs). It is increasingly appears that the IMF is enamoured of this South Asian country. It is likely to help the incumbent government overcome the FATF challenge as well.

Ihetesham Malik (Islamabad)

Copyright Business Recorder, 2021