FuturePAF
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The IMF, on the face of it, structures it’s deals to bring the country back to solvency. But with how deep the mismanagement goes in Pakistan, and that Pakistan on average goes to the IMF every 3-4 years, Pakistan will always be sacrificing future growth for restoring stability. Pakistan need a patriotic reform that only a large bailout/investment the likes of the South Korean efforts of the late 90s called for.
Perhaps this is the time the PTI should be going around the diaspora and local wealthy and middle class folks to line up a development pledge amongst top potential donators and investors to overhaul the system (WITH SPECIFICS) to change the culture so Pakistan never has to go back to the IMF for a bailout. A $10-20 Billion (2.5-5% of GDP) plan that seriously addresses all the core problems in a revolutionary move; such as No more subsidies on anything, and reforming all SOEs to operate on business models that can work for the long term. Ending elite capture especially the unfair advantage military owned companies may have in key industries. Ali Zafar tweeted that the wealthy should donate 5% of their wealth for the sake of the nation. A sentiment I agree with, but the fear that it will be squandered without much long term reforms probably holds back most if not all from doing it to rescue Pakistan.
The $10-20 Billion plan over 1 year would be the start of rebuilding the image and credit rating of Pakistan. With the hope that the show of confidence would allow Pakistan to refinance its other debts at better interest rates, and be able to get the white elephants off the national balance sheets; buy out retirees so that key industries can be reformed like the airlines, steel mills, railways, etc. the hope would also be that rapid reforms would incentivize the diaspora to sustain at least 2-2.5% of GDP investment into industries (and away from real estate/land that doesn’t generate export earnings) on their own, and this would attract other foreign investors to add at least a further 2-3% of GDP so growth can reach 9-10% sustained for the next 25 years. 9-10% is realistic IMHO, if we can sustain this level of FDI, and increase our resources availability such as arable land with proper management of resources. Growth like this is also possible with the current rate of population growth, which should also be trained to supply better export revenue earnings through services. Land reforms can also incentivize high agricultural outputs.
Considering how behind the eight ball Pakistan is, growth in agriculture for example would be huge (with growing markets like Africa right on our doorstep). Mining is an even bigger possibility, especially if local companies can mine their own resources as we should have learned should be a priority (due to Reko Dow) and use this skill set to bid to mine in Afghanistan with deals to allow cheaper rates to ship the minerals and process the minerals. Loss leaders that allow our industries to move up the value added chain on the backs of strategic opportunities. Visionary moves that pay off in 10-20 years time.
The IPP could have their deals renegotiated with a buyout by investors and donors, to get the albatross off the necks of the nation.
But with such a deal, the overseas investors would require a clearing away of old faces from all the political parties. Cutting the losses of all the money allegedly stolen by party leaders and their cronies. An agreed upon stance on how to deal with all nations so that Pakistani leaders don’t have to sacrifice economic development for rhetoric that alienates foreign powers Pakistan can’t afford to antagonize with undiplomatic statements. Pakistan needs a plan for 9-10% year on year growth so all past diplomatic issues can be forgotten and the image rebuild. We need a plan to reach at least sustained parity on a GDP per capita basis if not better with India by 2047, as it use to be pre-90s. 30+ years of mismanagement will probably take nearly as long to remedy.
A long term plan with buy in from the military and all political parties is what the nation needs, IMHO. If the money can be lined up, reforms have a chance.
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