After the IMF staff and the Pakistani authorities have reached a staff-level agreement on policies to be supported by a Stand-By Arrangement (SBA). Although the staff-level agreement is subject to approval by the IMF Executive Board, with its consideration is expected by mid-July. Yet, good news is coming from many friendly countries, like Saudi Arabia, Qatar, UAE, and China. The new SBA will support the authorities’ immediate efforts to stabilize the economy from recent external shocks, preserve macroeconomic stability and provide a framework for financing from multilateral and bilateral partners. The new SBA will also create space for social and development spending through improved domestic revenue mobilization and careful spending execution to help address the needs of the Pakistani people.
Pakistan has received $2bn in financial support from Saudi Arabia, Finance Minister Ishaq Dar told, a day before the International Monetary Fund’s (IMF) board is expected to give final approval for a much-needed $3bn bailout. Saudi Arabia deposited the funds with the central bank, boosting foreign exchange reserves when Pakistan had been left with barely enough to cover a month of controlled imports. It is just in time and will serve a great purpose. The people of Pakistan are grateful to Saudi Brothers for this gesture at a very critical moment.
Read more: Pakistan economy in long term ICU – Editorial
Understanding the matter better
Pang Chunxue, the Charge d’Affaires of the Chinese Embassy in Pakistan, met the Prime Minister and Finance Minister recently and ensured Chinese assistance financially. China is a close friend of Pakistan and historically always stood with Pakistan under all difficult moments in history. The friendship is even stronger today and China will stand with Pakistan in the future too.
Many friendly countries are sincerely assisting Pakistan to overcome the worst-hit economic crisis, and also some adversaries also do not wish to Pakistan slipped into default. Pakistan is a nuclear state and a pivot of global politics. It has been playing an essential role in making peace and stability in the region as well as globally. Its strategic location and real potential are known worldwide and recognized, even by its enemies too. It is the fifth largest populated nation, especially with 70% of its population under the age of 40. Pakistanis are known for talent, hard work, and resilience.
The current foreign exchange reserves in Pakistan are said to be around US Dollars 11 billion, which was less than US Dollars 3 billion a few months ago. The exchange rate has seen positive developments too. It means Pakistan is out of the red zone and gradually moving toward economic stability. It is encouraging development and the people of Pakistan feel relief.
However, for sustainable economic growth, double efforts are required. Policy measures are required and a stable political government is necessary. Law and order situation is an important factor in executing economic activities. Access to justice is an essential element.
Read more: Did Pakistan economy really progress under PM Khan?
Only a stable government can make the necessary legislations, policies, and reforms, required for an economic boost. The state is responsible for maintaining law and order, providing safety and security to its citizens, access to education, access to health care and justice, etc. Only enabling environment can make citizens engage in constructive and healthy activities. Incentive-based policies may be introduced by the state to enhance national productivity and wealth generation. The state is urged to fight against corruption, mismanagement, carelessness of officials, etc. The state is urged to respect talent, and merit, and denounce nepotism. Fight against corrupt, incompetent, and greedy officials.
Read more: Food security in danger: Pakistan Economy Watch
State machinery should be empowered with the highest degree of autonomy, with the strictest accountability. Rite of state, rite of law must be ensured by the state. The people of Pakistan can be tamed as long as the state is taking total care of the masses. Pakistan is blessed with immense natural resources, vast cultivatable land, and a huge workforce. If conducive environments are provided by the state, it possesses the potential to overcome all crises and gain its lost position in the international community. Never be desperate, bad times will be over, and the future is bright. Just need to struggle and enhance your efforts for a better tomorrow.
Prof. Engr. Zamir Ahmed Awan is the Founding Chair of GSRRA (Global System for Regional Cooperation and Research Analysis), a Sinologist (ex-Diplomat), Editor, Analyst, and a Non-Resident Fellow of CCG (Center for China and Globalization). He can be reached via email at awanzamir@yahoo.com.
The views expressed in the article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.