Failure of economic governance.

In a book I put together two decades ago, the late Meekal Ahmed, one of Pakistan's most distinguished economists, contributed a chapter titled 'An economic crisis state'. He had this to say then: 'Economic management in Pakistan has steadily deteriorated to the point where the economy has lurched from one financial crisis to the next. At the heart of the problem has been poor management of public finances and deep-seated unresolved structural issues in the economy that bad management and poor governance has exacerbated. The consequences are plain to see: macroeconomic instability, high inflation, poor public services, criminal neglect of the social sectors, widespread corruption, crippling power outages, growing unemployment, deepening poverty and a deteriorating debt profile.'

Meekal also wrote, 'An IMF programme gets some reforms implemented as part of its conditionality but as soon as the programme is over or ended by the authorities' themselves mid-way, all the reforms are rolled back.'

Twenty-three years later nothing has changed. This paragraph could well have been written today. Its summary of the outcome of poor economic governance is an apt description of the present economic disarray. For many decades successive governments, civilian and military, with few exceptions, pursued similar policies that contributed to or reinforced Pakistan's structural economic problems. In fact, their foreign policy and economic management intersected to produce an outcome in which the country became increasingly dependent on external financial assistance, aid and borrowing rather than finding a viable development path by relying on itself and safeguarding its economic sovereignty.

The pattern of external overreach and internal underreach persists. This has got to a point where securing funds/loans from friendly countries and international financial institutions is now celebrated by government officials and even deemed by sections of the media as major policy successes. Such claims are blind to the ineluctable reality that living off other people's money is hardly a national achievement. They provide false comfort to the ruling elite but do nothing to resolve the country's economic problems.

The source of the country's recurring economic crises is of course its fiscal deficit - a measure of governments constantly living beyond their means, unwilling to raise domestic resources and engaging in unrestrained spending. The fiscal deficit has been the...

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