Is default an option for Pakistan?

Keeping the government’s well-worn assurances aside, the International Monetary Fund (IMF) has yet not released the $1.2 billion tranche direly needed by Pakistan. While the country’s nuclear arsenal is not under threat, it is a testament to the fear of default that such questions are being raised. However, what would happen if the promised funds do not materialise? “Is Sri Lanka better after default?” the taboo question was voiced aloud by former Federal Board of Revenue (FBR) chairman Shabbar Zaidi, who seemed to think so in an interview with Dawn, a thought recently echoed by former president Asif Ali Zardari. “Sri Lanka is better off on all economic indicators. Their production is improving, their consumption habits are better, their exchange rate has stabilised, and their politics are less in flux. The default made them realise the country’s problems and take the hard decisions,” Mr Zaidi says.