If you are asking about taking loans then strictly adhere to IMF directions. They have a team of economists who know what they are doing. It will not be very popular measures. It may lead to temporary inflation for a while. But few years from now, it'll turn out to be fruitful.
What Pakistan in general should do is, break down the Zamindari system and have a new land reform. Put ceiling on how much land one person can hold. Empower the provincial governments, let them have more freedom from central government. These are the basics. There is a lot to be done on structural reforms.
Pakistan is not in a similar situation as India in 1990's. I'll explain.
It wasn't simply Indian economy going down in one day. Back in those days, India and West weren't at good terms and as a moderately socialist nation our relationship and interests was aligned with USSR. So, our main export partner during the 1990's were none other than USSR, unfortunately Soviet Union split up into 15 countries (If my guess is right), which put pressure on our exports started dwindling.
In the 1990's Iraq attacked Kuwait, and in turn the Americans started a war with Iraq, ships couldn't reach Persian gulf and both Kuwait and Iraq were our largest oil suppliers, this lead to an oil crisis.
The then leadership was involved in a lot of scams and the political situation in India was a turmoil. Like the IPKF disaster in Lanka, Bofors Scam, Shah bano case, Rajiv Gandhi assassination etc...
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Because India was aligned with USSR, US vetoed IMF bailout plan for India.
So we had to do the unimaginable thing at the time, we pledged around 70 tons of our gold reserve to IMF for $3.9 billion (todays $7.5 billion).
IMF put conditions, we had tough import conditions and duties on import goods were as high as 400%. So, we had to strike down a lot of such duties. Remove import restrictions.
Abolished license raj, until 1991 we need to have license to import even a screw. License was hard to get due to restriction and red tape. Also we had production licensing, i.e the government decided on what to produce and how to produce how many employees should be given job etc.
Then allowed foreign investors to come to India and start their own industries. This along with with Ambani and Tata lead to a stock market boom. All this contributed to more investments to India. Many government owned industries were privatized.
@Max Pain Do you see any similarities with the case of Pakistan? If yes, then please explain them, I don't know Pakistani laws regarding all that.
Anyway,Pakistan is in a better condition vis India in 1990's. And you may overcome the troubles in few years, it probably wouldn't take decades if correct measures are done.
