DAWN Editorials - 27th March 2025

[zarnishhayat]

Some progress

THE finalisation of a deal between Pakistan and the IMF on the first Extended Fund Facility programme review and a new arrangement that will enable Islamabad to access additional funds under the Resilience and Sustainability Facility is a much-needed shot in arm for a wobbly economy.

It should also put an end to speculations engendered by departure of the IMF team without signing the customary staff-level agreement. The statement issued by the IMF mission chief after the staff-level agreement shows that the lender is satisfied with the progress Pakistan has made on the benchmark programme targets.


“Over the past 18 months, Pakistan has made significant progress in restoring macroeconomic stability and rebuilding confidence despite a challenging global environment. While economic growth remains moderate, inflation has declined to its lowest level since 2015, financial conditions have improved, sovereign spreads have narrowed significantly, and external balances are stronger,” the statement elaborates.

Indeed, the previous short-term facility of $3bn and the ongoing 37-month funding programme have helped Pakistan stave off the threat of default and stabilise the economy. But are we on course for long-term recovery? Opinion is divided. The hard-won macroeconomic stability is only a short distance away from a deeper crisis. We have seen the economy make a recovery under the IMF’s oversight many times in the past only to collapse while still in remission due to the impatience for rapid growth.

Therefore, it is more critical than ever to stay the course, as the lender has advised, to build resilience by strengthening public finances, ensuring price stability, rebuilding external buffers and eliminating distortions in support of inclusive and sustained private sector-led growth. This is especially crucial as the downside risks are still elevated. Besides, there are “potential macroeconomic policy slippages — driven by pressures to ease policies”, such as tax discounts for real estate, retailers and other parasitic sectors.


The government’s failure to broaden the tax base, its proposals to reduce transaction taxes on property and slash retail electricity tariffs seem to have prompted the lender’s warning.

However, the macro slippages resulting from erratic policymaking are not the only risk. The need to stick to the reforms agenda becomes even more crucial given the emerging geopolitical shocks to commodity prices, tightening global financial conditions, and rising protectionism in addition to climate-related challenges; these factors could also undermine stability.

Any push to achieve growth before sustainably controlling runaway fiscal deficit, keeping inflation in check, reducing power prices, creating an enabling environment for private investments, and building resilience against climate change challenges may prove counterproductive.

Published in Dawn, March 27th, 2025


Time to talk

IN an encouraging development, the government has signalled openness to PPP chairman Bilawal Bhutto-Zardari’s offer to mediate between the ruling coalition and the PTI to facilitate the latter’s participation in another session of the Parliamentary Committee on National Security. The PTI was notably absent from the previous meeting — held amid a surge in terrorist violence, including the hijacking of the Jaffar Express in Balochistan — citing the incarceration of its party founder as justification. That meeting, also attended by the military leadership, was meant to forge political unity on the urgent matter of countering militancy. Its effectiveness, however, was blunted by the absence of the country’s largest opposition party. Mr Bhutto-Zardari’s attempt to rise above partisan interests and invite all political forces to the table is appreciable. His call for setting aside differences in the national interest recognises the seriousness of the situation: Pakistan is once again facing coordinated attacks on civilians and law enforcement, especially in KP and Balochistan. He rightly noted that consensus-building has become increasingly difficult — but remains essential if the state is to marshal its resources effectively against the threat of terrorism. The recent spate of attacks highlights the reality that fragmented political responses only embolden terrorist elements seeking to exploit national divisions.

It is welcome that the government has responded positively to his initiative. Dialogue is not a concession in this context; it is a democratic responsibility. The PTI, for its part, must now reflect seriously on the costs of continued disengagement. National security cannot be made hostage to intra-party considerations. In boycotting the previous session, the PTI put personality politics ahead of the national interest — a misstep that must not be repeated. Elected representatives are duty-bound to put their constituents’ safety above political strategy. It is also worth remembering that effective counterterrorism policy requires political ownership. Without consensus, implementation remains weak and short-lived. The meeting must not be symbolic: it should produce concrete understandings on how to secure vulnerable regions and address the drivers of militancy. Mr Bhutto-Zardari’s offer is a reminder that consensus is still possible — if all sides show political maturity. The PTI must step up. If there is to be a united front against terrorism, then this renewed opportunity to talk must not be squandered.

Published in Dawn, March 27th, 2025


Black Sea truce

WHILE the Trump administration may have no problem with Israel renewing its rampage in Gaza, it is playing peacemaker in the Ukraine conflict. American officials had been meeting their Ukrainian and Russian counterparts in Riyadh over the past few days, and on Tuesday, a naval ceasefire in the Black Sea was announced. Efforts to revive an earlier commitment by Kyiv and Moscow not to hit each other’s energy infrastructure were also endorsed. Washington was basically passing messages back and forth between Moscow and Kyiv in the hopes of securing a temporary ceasefire. But even as peace talks were underway in the Saudi capital, Russian and Ukrainian forces continued to trade fire. No miracles were expected from the parleys in Riyadh, and the present outcome appears to be merely a fragile baby step towards peace.

The fact is that with the change of guard in Washington, Ukraine has lost its major benefactor and financier. While the Biden administration portrayed Kyiv’s battle against Moscow as a grand, almost cosmic duel between the ‘noble’ forces of democracy against the ‘dark’ encroaching forces of authoritarianism, Donald Trump harbours no such illusions. The way the US president and vice-president humiliated the Ukrainian president in the White House last month is an apt illustration of Mr Trump’s feelings about Kyiv’s current leadership. Also, digressing from his predecessor’s approach, Mr Trump has opened lines of communication with Russian President Vladimir Putin. The cards, therefore, are very much stacked against Ukraine, as the US is no longer interested in bankrolling the war, while Europe is in no position to finance or arm Kyiv. Morally, Russia should withdraw from Ukraine while Kyiv must assure Moscow that it will not be playing the role of Nato’s sidekick in an endeavour to encircle Russia. Unfortunately, the trust deficit between Kyiv and Moscow is huge, and despite the US-backed diplomatic push in Riyadh, peace is unlikely unless both parties make significant concessions.

Published in Dawn, March 27th, 2025