If the recommended reforms were inplemented by Pakistan, you and I wouldn't be talking about Pakistan's debt to the IMF right now. The previous governments have all failed to implement recommended reforms, which is why Pakistan's economy is terrible right now.
You'll notice, whenever imf policies were starting to be implemented, the economy stabilized, but the government in charge backed out in the middle of implementation, due to political games, rather than a genuine concern for Pakistan's economy health.
@Nilgiri @BHarwana guys, calm down. We're having a civil discussion. Nothing we say on here really matters, and won't have an impact on the government of our respective nations (Canada, Pakistan, or India).
Take it easy. If you disagree with each other, that's fine, but let's all get along, because at the end of the day, we're all little guys getting screwed by our elitist governments.
We (me and bharwana) get heated its true....because we clash more broadly in other threads when I question his assertions of A = B as being actually A = A when it comes to economics in general.
I just think there is enough threads on Indian economy and its own set of problems/credibility already...no need to drag into thread like this about Pakistan set of problems that have now metastasized into its broader foreign exchange/financial sector (which is on whole different level of intensity to do compared to purely internal debates/issues)...and will need a massive course change against the (low investment rate) inertia of status quo running it for decades now.
The belt must be tightened (a lot, as much needed to pay back the loans coming up and not go back to same ole same ole after it and start whole thing again....but persevere and actually get something out of it - i.e investment/savings culture).
Pakistan needs to stop just eating too much (for its frame) and get up from table and start producing things of note with the hammer and pen at the workspace...needs to be leaner and meaner even if it means you have withdrawal symptoms from the earlier easy street buffet....you get out what you put in. Put in excuses and conspiracies, thats what you get out too.
Rather it must balance at least 10 - 20% more (on top of the 15% it generally stuck at) of the time/effort/resources (which all manifest as the final GDP-liquidity denominators) it uses to just buy and consume stuff into investing/saving (long term stuff that gets you out of a rut)...and improving the institutions that are all related to it.
This investing must also be as much focused on production units as possible (within existing environment/buffer)....not grandiose infra logistics projects which seem to be where CPEC priority is. That stuff can happen more generally on its time and pace (esp after you get the buffers and stabilisation from the immediate production of your factories to reinvest into networking and branching more deeply into the country).....but focus has to be investment into hard production units using whatever labour/business acumen on offer inside Pakistan
right now....not pie in the sky miracle projections of later.
The whole order of this build the large infra first and then everything comes later automatically....will benefit the ones (on all sides for whatever reason) providing that narrative. The way to check if that narrative is actually true, is see what the main infra-loan-provider did that same thing for himself in his case. You will find he didn't....it has always been production unit investment first (and the very basic infra needed to keep it just functional) and then the larger scale stuff with time when you earned enough for say a decade or two. The economy of scale factories (to generate foreign exchange by export) all hugged the coastline of China initially for a good chunk of years for a reason...china didnt have the infra back then to have such factories in its interior and have them competitive. That all came very much later after stage 1 (Deng xiao peng stage i call it) was in operation for good amount of time first.
Even with its human capital investment as low as it is and lousy framework and bureaucracy.....Pakistan can still do lot lot lot better if it focuses on investment related to direct basic (forex generating) production in short term (just learn from Bangladesh as much you can for that)....by taxing its consumption however it needs to and ensuring as much gets to investment as possible into basic industries that are opening up competitively now as China leaves them behind etc. Intent/goal of this current admin must be to at least to never again have a BoP crisis again like this at the very least (and all the long term damage that does to having the argument for a democratic system over an autocratic one and institutional preferences governing that).
It is approaching do or die kind of stage because of all the buses Pakistan missed or even refused to board have taken their relative toll (w.r.t world situation where many did board those buses.... compared to Pakistan) It must balance itself structurally and not miss any more.
People were offended on PDF when I drew parallels between Pakistan and North Korea previously, so I will do not again. That may be where we are headed anyway in a few years.
Pakistan has a vast amount of emigrant + Pak origin people in important Tier - 1 economies (Especially the two big english speaking ones). It is very different to North Korea case which is truly a hermit kingdom.....in the context of how any Pakistani leader/movement potential to just cut off completely.
Up till roughly the 90s, Pakistan was doing lot better than the developing world average so there is much inertia from that still...though it glaringly sacrificed lot of institutional development in those better years. But now there has been really crap drift for 30 years....
So I don't see it headed to north korea kind of thing. There is huge amount of remittance for example in Pakistan case that help it to finance its consumption mismatch in foreign sector. Just even accounting for that the CAD worsened to 5% and even more for good chunk of years....and this prompted over time (like a wind never dissipating) exposure of the rickety structure of kicking the can (i.e take a loan and use to prop up consumption strength of PKR artificially) to satisfy oligarchs status quo. The foliage they invested in covering this all up (at least the basic process) has almost entirely blown away...it simply cannot be denied anymore....what remains to be seen is how many of the people (at all levels) see this and do something....or just play emperor news clothes kind of charade still.
