Will the next Aug 14 see a stable Pakistan?

Economic growth must be driven by private investment to be stable and sustainable. Little wonder Pakistan has never been able to institute sustained growth due to insufficient investments. In order to make up for lower investments, successive civil and military governments have pursued policies that encourage consumption, mostly imported consumption due to lower domestic productivity, through large public investments to pull off higher growth rates as part of their political strategy. It, therefore, is not surprising to see each short period of a so-called consumption-driven’ economic boom’ followed by a longer period of ‘economic bust’ with high fiscal and current account deficits. In recent years, the frequency of such boom-and-bust cycles has significantly increased. This explains the reason why Pakistan has sought 23 International Monetary Fund (IMF) bailouts since 1958 and 14 since 1988, which always provide temporary relief and are discarded midway as soon as the faltering economy shows some signs of stabilisation, enough to allow the rulers some space to return to their consumption based illusion of prosperity. The ongoing IMF funding programme approved last month after months of discussion is the sixth since 2000.