Talking to mediamen at the signing ceremony of an MoU between PIA and PRI to boost the inflow of home remittances on 29th December, Finance Minister Shaukat Tarin nearly lost patience over Friends of Democratic Pakistan's abject failure in extending the promised assistance to the country. Looking desperate, he asked the FoDP to clarify whether or not they were providing the pledged assistance to Pakistan.
The most profound statements are said in silence
-Lynn Johnston
Tarin expressed his serious concern over the fact that only 200 million dollars had been received from Saudi Arabia while others were employing delaying tactics in relation to the pledged funds, which Pakistan desperately needed. Criticising the role of the FoDP, he remarked, of course with a tinge of sadness, that "we are not untouchables for whom they are using the delaying tactics".
Tarin's outburst, at this juncture, is largely understandable. Faced with the threat of insolvency and mounting economic problems due partly to its decision to fight militancy, Pakistan's first preference was to ask for assistance from the friendly countries who were also its partners in the war on terror, in some way or the other.
The present government was so sure about the positive attitude of the international community in this respect that President Asif Ali Zardari met the concerned top leaders and attended several meetings himself to advocate the cause of the country.
Finally, an amount of over 5 billion dollars was pledged to be disbursed, but with the stipulation that Pakistan must enter into an agreement with the IMF to assure the international community that it was following a stringent reform process for the sustainability of its economy.
Now that Pakistan is following the indicated path faithfully and the IMF appears to be quite satisfied with the pace of reforms, as is evident from the latest release of the fourth tranche of Stand-By Arrangement, there seems to be no justification or excuse for delaying the promised disbursement of funds by the FoDP.
Simply put, the donor countries should not have made such commitments if they were not serious in fulfilling them. It is obvious that the government had planned its economic policy strategy on the assumption that such aid would be forthcoming in due course of time, but now it would be accused of being naïve for its profound failure to understand the real intention of the donor countries.
Some of the circles would even say that the present government acted like a fool when it was drawn into a war against its own people by some unfriendly countries. While there is ample justification to ask the international community to clarify its position with regard to the promised assistance, it is equally clear that Pakistan cannot dictate its terms on such matters.
Rather, the country needs to learn certain lessons from this severely unsavoury experience. No country or outside institution owes us a living and we must always try to cut our coat according to the available cloth.
It is quite obvious that the authorities of the country have committed themselves to fight on so many fronts and raised the expectations of the people to such high levels that the existing resources are too meagre to meet the requirements of this untenable situation. Such a mindset has also landed us in a vicious circle, where we have always to beg from others to fulfil our unmet desires/needs.
To begin the process and achieve the goal of a self-reliant economy, we must, first of all, focus on macroeconomic stability. The budget deficit, for instance, needs sharp trimming, through a combination of drastic expenditure reduction on a durable basis and increased resource mobilisation.
Exports have to be enhanced and imports have to be reduced to have a sustainable current account balance and maintain foreign exchange reserves at a reasonable level. A tight monetary policy has to be maintained to control inflation and increase savings in the country.
The problem is that policy measures to be implemented in all such areas are going to be harsh and likely to be resisted tooth and nail by those segments of society who are likely to be adversely affected by the new policy environment. Therefore, unless everybody in the country is not on the same page and prepared to make the necessary sacrifice, Pakistan would continue to be in a denial mode and face the same kind of desperation.
In the meantime, we would like to remind the Finance Minister that in international diplomacy, there are certain things which are self-evident but not spoken openly to avoid embarrassment. It is not necessary for the donor countries to say loudly that they will not be able to meet the commitments made earlier because of a change in the domestic or international environment. Their silence on the matter should be enough to convey the intended message.
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