Inconsistencies and disconnects

While it played a crucial role in liberalising the economies of the communist bloc, it now appears to support heavy-handed regulation and price controls in a developing country like Pakistan. Such inconsistencies raise questions about the adaptability and relevance of IMF programmes in different contexts. In our case, the domestic market continues to influence the pace, pattern and level of growth. Policies are focused on protecting an industrial structure that produces low productivity/ low value-added goods. The growth of one industry has created a market for another — flourishing with varying degrees of inefficiencies. The result is that all such markets have grown together. The outcome is a formal private sector whose habits and investments have not changed over time. Exporting a similar range of goods (with modest upgrading to higher value-added goods) depends on subsidies and concessions.