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Halting Pakistan's economic free-fall
The upcoming meeting of the so-called 'Friends of Pakistan' on November 17 in Abu Dhabi to consider Pakistan's economic plight brings mixed prospects for the south Asian country's economy.
- By Farhan Bokhari, Special to Gulf News
- Published: 22:58 November 1, 2008
The upcoming meeting of the so-called 'Friends of Pakistan' on November 17 in Abu Dhabi to consider Pakistan's economic plight brings mixed prospects for the south Asian country's economy.
This group includes the United States, the United Kingdom, European Union, Saudi Arabia, China, the United Arab Emirates, Qatar and Kuwait.
The meeting is likely to take stock of Pakistan's economic challenges and future outlook amid hopes that the country's government will receive new commitments for crucially needed assistance.
The meeting will likely follow some indication of the extent of support coming from the International Monetary Fund (IMF) where Pakistan has turned for support in terms of a large new loan programme.
This is an essential stepping stone for Pakistan towards getting back on the road to solvency as even friendly countries had urged Pakistan to first accept rigorous economic discipline imposed by the IMF before it expects more assistance at a time when global economic pressures have imposed unprecedented curbs.
"Pakistan has to accept tight control on areas such as tax evasion, neglected for long, before it would receive help and sympathy," said one western econ-omist in Islamabad discussing on background the emerging outlook for the south Asian country.
For policymakers such as Shaukat Tarin, the new de facto finance minister, a recovery has to be built upon a home-grown programme and there must be credibility tied to such a programme.
Tarin in his public comments has said an economic recovery plan prepared by Pakistan and shared with potential donors including the IMF "has generated interest and excitement over our plans. We are very serious about tackling our economic issues."
Such comments are indeed meant to inspire optimism among a range of stakeholders from those with big money and stakes in the financial markets to ordinary Pakistanis armed with a growing list of econ-omic challenges that are bringing about unprecedented new pressures.
Among these stakeholders, those in the equity markets are the ones with the highest stakes.
The sharp fall in values on the Karachi Stock Exchange (KSE) and further falls which are still expected, together present the pros-pect of an equity meltdown.
The KSE's decision in August to accept a lock on the extent to which share prices can fall indeed presents both an opportunity and a challenge.
The writer is a journalist based in Pakistan
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