ISAS Insights

The author, using his many years of experience working in the countries around the globe, suggests that the new administration in Islamabad should not panic into taking economic actions not warranted by the situation the country faces. The doom and gloom talk in the press, both inside and outside the country, could result in the government taking actions that would do long-term damage to the economy. He argues against rushing into the arms of the International Monetary Fund (IMF) as that would result in imposing conditions that would squeeze growth out of the economy. The gross domestic product is growing at the healthy rate of 5.8 per cent this financial year and net foreign reserves of US$9 billion (S$12.3 billion) can finance two months of imports. This is below the three-month criterion of good health used by the IMF but not by such a large amount to induce panic. Instead of moving in haste, the country should make an intelligent use of the resources flowing in from China as a part of the China-Pakistan Economic Corridor investment programme. Rather than panicking into taking hasty actions, the new rulers should prepare for a better future.