Averting default

It is hard to recall the last time when Pakistan mounted three abortive attempts to restart one IMF programme in a single year. This was the year it all fell apart — the “hybrid experiment” and the growth bubble it spawned, as well as the joyous triumph with which the PDM government swore itself into power. The whole year Pakistan spent trying desperately to avert default and manage crippling shortages of foreign exchange. The year opened with the government of the time moving desperately to complete the sixth review of the IMF programme signed in July 2019. That programme was suspended in March 2020 with the arrival of Covid and the attendant lockdowns. Efforts to restart it began in November 2020 by Hafeez Shaikh in negotiations that were supposed to be completed by the following January, but which dragged on to March 2021. Discussions with the Fund had ended in February and the staff report of the review was completed in March. Cabinet approval was required since two key conditions involved getting two key pieces of legislation approved and presented before parliament.