With uncertainty looming over the IMF programme, the past few months had been challenging for Pakistan’s economy.
During this period, rumours of default were rampant, and criticism was directed towards Finance Minister Ishaq Dar for the country’s economic situation. While our pieces have been critical of the handling of the economic situation, it is essential to adopt a balanced approach that acknowledges both areas of improvement and noteworthy achievements.
Despite facing criticism, Finance Minister Ishaq Dar remained firm and steadfast in his position, working diligently alongside his team to steer the economy towards a safer zone. Constructive criticism is necessary to identify areas for improvement and foster growth, but it is also crucial to acknowledge commendable efforts without bias. The opinion also aims to recognize the positive developments and commend some good work done by Ishaq Dar, the economic czar.
One significant achievement is the approval of the IMF standby arrangement worth three billion dollars. The move unlocked inflows from friendly countries such as Saudi Arabia and the United Arab Emirates, bolstering foreign exchange reserves to the tune of fourteen billion dollars. This positive step is expected to have a ripple effect, with other financial institutions like the World Bank and Asian Development Bank now likely to open their coffers.
Credit for this achievement goes to Prime Minister Shehbaz Sharif for his productive meeting with the IMF Managing Director in Paris. Subsequently, Finance Minister Ishaq Dar led the talks with the IMF team, resulting in an understanding that provided much-needed breathing space and mitigated the balance of payment crisis.
Amidst dire predictions of an impending default, Ishaq Dar remained consistent in his assertion that such a scenario would not occur. He proved to be true to his word, successfully clearing all external payments on time.
Another noteworthy accomplishment is the reduction in the current account deficit, which decreased to a mere 2.56 billion dollars during the fiscal year 2022-23, a considerable decline from the previous financial year’s deficit of 17.4 billion dollars in 2021-22. It is worth noting that the last four months of the previous fiscal year recorded a surplus in the current account, with June showing a surplus of 334 million dollars. These positive developments reflect the effectiveness of the government’s policies in stabilizing the country’s external sector.
Furthermore, the government has introduced an economic revival plan with a focus on enhancing the productivity of crucial sectors such as agriculture, industries, information technology, mining, and defense production. Notably, both the military and civilian leadership have joined forces in launching initiatives in these sectors. To achieve true self-reliance and end dependency, this journey must continue uninterrupted. Finance Minister Ishaq Dar’s suggestion to empower the caretaker setup through legislation to make important decisions holds merit. Such a caretaker setup should be installed which has the capacity to sustain the current positive momentum. Irrespective of whosoever forms the next government, structural reforms within essential institutions are inevitable for lasting progress.
