Needless to emphasise that the PML-N government has inherited an economy that was in a nosedive; a situation triggered by a multiple debilitating factors, including an unprecedented poor handling of by the burgeoning energy crisis. It was, therefore, logical for the government to accord top priority to the revival of the economy, especially fixing the energy crisis through short and long-term initiatives that lead to permanent energy security for the country. That is exactly what it is trying to do by focusing on developing the necessary infrastructure, putting in place a communication network to help propel the growth process and initiating new power generating projects in the country. There are no two opinions about the fact that these undertakings require huge investments and for the resource-starved Pakistan, the only option available is to seek foreign investments and financial assistance to reinvigorate the sagging economy. Against this backdrop, two very significant and encouraging developments took place in this regard during the last week, which indicate the seriousness and sincerity of purpose of the government.Prime Minister Mian Nawaz Sharif embarked on a five-day official visit to China and through his interaction with the Chinese leaders and bigwigs of the corporate sector, he has been successful in convincing them to exploit the myriad of investment opportunities in different sectors of Pakistan, especially power production. Both the countries have concluded eight agreements and MOUs for building 22-km tunnels to facilitate the realisation of the proposed economic corridor, constructing the Lahore-Karachi Motorway, laying of optic fibre between the two countries, developing infrastructure in Gwadar, including an international airport and bullet train between Peshawar and Karachi, upgrading the Karakoram Highway and rehabilitating the Attabad Lake; in addition to an abiding commitment from the Chinese leaders and financial and investment institutions to assist Pakistan in setting up hydel and coal based power projects in which the Chinese companies have unmatched expertise. As expected, the visit has been very successful and our Chinese friends have exhibited their unflinching interest in promoting the economic well being of Pakistan in a big way. All these projects have a tremendous potential in reviving Pakistan’s economy and going a long way in tackling the energy crisis on long-term basis. Our energy requirements, according to the International Atomic Energy Agency (IAEA), are increasing by 8 percent annually and Pakistan will need nearly 50,000MW of electricity by 2025. The successful implementation of these projects, however, will depend on the improvement of law and order situation and the end of terrorism in the country.The other development that occurred was the conclusion of an agreement with the International Monetary Fund (IMF) for a $5.3 billion bailout package under the Extended Fund Facility (EFF). The significance of clinching this deal lies in the fact that Pakistan badly needs an overall financing requirement from external sources to the tune of $11.5 billion during the current fiscal year. To meet these requirements, Islamabad is also planning to approach the World Bank and Asian Development Bank (ADB) to raise $4.7 billion, besides envisaging $4 billion through private investment and privatisation proceeds. Already Pakistan owes a payment of $3 billion to the IMF, this year, from the previous loan and the new loan will mostly be used to pay for that. Had the deal not been taken place, Pakistan was likely to default on the previous loan with all the accompanying disastrous consequences. The government, unlike the previous regime, had rightly decided to approach the IMF for the new arrangement that was dictated by harsh ground realities. Apart from saving Pakistan from default on its debts, the deal will also help in stemming the confidence crisis, checking capital outflows and improving foreign exchange reserves situation, besides easing pressure on the exchange rate.According to economic analysts, the move by the Fund will encourage other international financial institutions to extend loan facilities to Pakistan, which are vitally needed to tide over the economic difficulties giving a substantial boost to the development process. However, these dividends can be realised fully by successfully carrying out the conditionalities of the IMF programme like broadening the tax base, phasing out of statutory regulatory orders (SROs), reforming the energy sector, retiring of circular debt, addressing the fiscal issues and involving the provinces in maintaining financial discipline through generating a surplus of Rs 23 billion.The federal government has already initiated strategies on the conditions proposed by the IMF in its budget for 2013-14; in fact, these steps actually convinced the donor agency to agree to the new loan facility. The retiring of circular debts has been given top priority and Rs 326 have already been paid out of the outstanding amount of Rs 500 billion. Further, the tariff structure of electricity is being rationalised through a programme of targeted subsidies, rather than across the board facility. Measures are also afoot to check power theft, recover outstanding bills and make new investments in the power generation projects. Nevertheless, the leadership in Islamabad, through strengthening the social safety nets, have ensured that the poor segments of society remain unaffected by the cost of necessary adjustments. It is, indeed, hard to take issue with the vision and strategies adopted by the PML-N government to revitalise the economy. But that, undoubtedly, will depend on the successful implementation of the IMF targets through envisaged structural reforms, facilitated by improved law and order situation in the country. 

The writer is a freelance columnist.