With the current economic situation and the rise in inflation, the Pakistan Tehreek-i-Insaaf (PTI) government is relying heavily on foreign aid under the International Monetary Fund (IMF) program to help ease the situation domestically. Pakistan has been able to comply with many of the clauses postulated by the IMF and after the recent review, a loan of $1 billion has approved by the Asian Development Bank (ADB). This loan will go towards helping the government implement reforms and actions to improve the current account deficit, strengthen the revenue base of the country and to help the poor against the impact of the economic crisis afflicting them.
Since the growth of the economy is projected at 2.8 percent in the current fiscal year due to the low revenue collection and the losses being incurred by the local industry due to an increase in costs of production, the government needs foreign aid to help bridge the gap in the economy. PTI’s economic plan does not follow an ad-hoc relief trajectory for the masses, rather it is a plan laid out over the next three years in order for the country to have a sustainable growth trajectory, the only aspect which can provide relief at this point is foreign funds coming in. Another extension of the same agenda is another policy-based loan being offered by the ADB worth $300 million, which is supposed to help the government in ensuring financial stability, governance and tackling hurdles in the policy infrastructure in Pakistan’s energy sector.
At this point, the government needs to work towards providing incentives to local investors to invest in the economy and provide relief to local industries and businesses so that the uncertainty in the market can be overcome by steady activity in the market. The biggest hurdle right now is that despite progressive policies, there are hindrances in implementation and due to the vast network, many are adamant on finding easier means to conduct business activities, which is why there is a lot of push against the change being implemented by the government.
It is important to engage stakeholders so that the government can fight the narrative of it lacking any business acumen and work its way towards earning the trust of multiple stakeholders within each sector in order to work efficiently. These international funds can provide relief only to a point till internal matters are sorted and for that, collaboration is the key.