What local and international media sources are calling a scathing indictment of Pakistans economic management team may be a call for Pakistani authorities to revisit their negotiation stance with aid and loan agencies.
Reportedly, the Asian Development Bank has declared $692 million in loans to Pakistan to be at risk on grounds of tardy implementation of projects financed by the lender.
While many will not be surprised at the belated implementation of projects in Pakistan, indicative of a lack of management capability of the government; the issue raises more concern over aid and loan flows to the country.
"Aid from organisations such as the IMF and ADB are critically linked to Pak-US relations," said Shahid Hasan, a senior economist of the country. Since assistance from donor agencies depends on the Letter of Comfort (LoC) from the IMF, of which the US is the key member country, the link is not very hard to comprehend.
The sixth tranche of IMFs $11.3 billion loan package to Pakistan is already pending, contingent upon the implementation of performance benchmarks set by the Fund as regards the countrys fiscal health.
As the country meets the IMF today in Dubai, perhaps a realignment of negotiation stance should be the order of the day.
Akbar Zaidi, a senior economist of Pakistan contends that thorough tax collection, rather than aid-dependency, which, he believes, distorts domestic development, is vital for Pakistans economic health.
And Pakistani authorities have acceded to their less-than-satisfactory performance when it comes to taxing the elite and agricultural income.
Yet, it is important to understand that these measures alone are not enough to resolve the plethora of issues that Pakistan faces thanks to the ongoing war on terror, right from regional strife to the sorry state of FDI inflows.
Now is the time when discreet negotiation skills on part of the Pakistani officials will be of grave consequence, particularly with respect to the significant role of Pakistan in the US combat against terrorism and the consequent repercussions on the countrys economic, social and political health.
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