Preventing Default of Pakistan: Economics article by Hameed Khan

In a serious situation an immediate attention and action is needed to overcome troubles. It must be brought under the act of understanding that which are the factors, due to which the country is moving towards default or governance failure. Is it due to the microelectronic factors such as, sudden drop in accommodation prices or recession. Or is it due to the structural imbalances or high level of the government spending, corruption, and or is it due to the inadequate tax revenues. While understanding to the causes of the default or those challenges that come in a way to resist the country development is really important. So that, an immediate and proper action would have to be taken against these curses.

Once we find that the actual causes of the default and risk of the default is identified,  then there will be easier for policy makers to make policies properly according to the needs of the time of defaulting. It is also crucial to address those of the facts against challenges to the country’s governance and to make planning for the removal of those remedies. The planning to get rid of the defaulting risk, it is then needed to increase the tax revenues, and cutting expenses.

Pakistani Economy

Seeking of international assistance in such a critical situation is necessary and it would be given a paramount importance, and it would also be considered to replace the existing discrimination, geo strategic issues with neighbouring countries, with those of the positive traits of relationship, it is necessary because of this so that those of neighbouring countries will consider the defaulting risk. Then, after the consideration, ask them to assist in this risky situation. Seek international assistance from the international organisation such as IMF or the world bank to redevelop and reconsider upon the country’s economy, governance and democracy. These organisations will also help in providing the necessary measures and proper planning and policies,  which are to be taken according to the need of the time. Building relationships with these organisations would provide the country those policies to manage their debts.

Another thing which is to be considered in such a time is that to communicate with the citizens and the stakeholders to explain the situation and measures that is to be taken accordingly. This can build healthy relationships between the people and government based on trust and support. But, managing and controlling such a problems like debt crisis, corruption, inadequate tax revenues,  requires the comprehensive approach that should addresses the root cause of those remedies and challenges. Then those of the credentials should involves engagement with the creditors. It would also be of a paramount importance that to focus on the external assistance from the world organisation like IMF and World Bank. There should also be an effective communication with the citizens.

Hameed Khan is a student at Government College University, Lahore. (GCU, Lahore)