Prime Minister Imran Khan’s government has been able to delay the IMF bailout package for the present. The Kingdom of Saudi Arabia (KSA) has agreed to give Pakistan a short oneyear deposit of $3 billion to shore up its reserves. But this deposit is only meant to build confidence to pay immediate debts and will exit the system after twelve months unless renewed. In addition, Saudi Arabia will sell $3 billion worth of oil every year for three years on 12 months’ credit. This means Pakistan shall receive a loan of $4 billion in Year One which must be paid back after twelve months, and $3 billion in Year Two and $3 billion in Year Three which also must be paid back after each twelve-month period.

Despite the euphoria this is a drop in the ocean. Therefore, Pakistan will have to go to the IMF for a bigger package just to keep its economy in a running condition and to avoid bankruptcy. The punch line in all this is that the Imran government must hold its breath, tighten its belts and submit to the donors’ political and economic conditions, which in any case is an unpopular prospect. There is a powerful sense of déjà vu in this situation. It’s back to the failed formula of roaming the corridors of “friendly” governments and loan-giving agencies like the IMF, World Bank, Asian Development Bank with a begging bowl in hand. Every past government in Pakistan – civil or military – has accused its predecessor of bequeathing it a bankrupt economy and sought quick fixes like the present one is doing, without much success.

The most striking aspect of the Saudi bailout was that on his return from Saudi Arabia, Imran Khan declared that Pakistan would mediate in order to secure peace in Yemen, which has been battered by two years of Saudi-UAE joint bombing campaign against the Shia Houthi militia supported by Iran. The Houthis overthrew the pro-Saudi government in Yemen. The air campaign to punish them has resulted in thousands of deaths. Reports from Yemen speak of serious starvation with hundreds of thousands of children suffering from malnutrition and facing death as a blockade remains in place. Imran Khan’s government claims that bankrupted exchequer drowned the country in debt.

He admits to being in “desperate” straits. But he is reluctant to take IMF loan to pay off old loans. Instead, he wants to replenish the coffers by plugging corruption, arm-twisting the rich to cough up, and incentivising overseas Pakistanis to increase remittances and invest in their home country. Unfortunately, however, the dice is loaded against him for any quick fixes. Rooting out corruption is a longterm problem because state institutions and politicians, including those who form the influential core of his party the PTI, are wading in it.

By and large, too, the rich are ensconced in safe havens and the arm of the law is neither strong nor long enough to flush out their money. Nor have Overseas Pakistanis shown much enthusiasm in the promise of a “Naya Pakistan” in view of the stumbling U-Turns taken by the new government which have eroded trust and confidence in its ability to set things right. There is glee in the Establishment and it’s fully supported protégé – Imran’s party – that their plans for the time being have saved the day of bankruptcy for them.

The Saudi package for next three years and also the expected $6 billion of Chinese loan would help them for the next few months. Imran’s visit to China was preceded a few weeks ago by that of Pakistan’s army chief who is reported to have discussed the further development of defence and security cooperation between the two countries at very high levels in Beijing. The decisions for intensified security cooperation are expected soon between Pakistan Army and Chinese leaders. Imran is again visiting China in the first week of November 2018.

The air is also full of news about another $3 billion of loan or aid coming from United Arab Emirates and Malaysia. Where does all this lead to? The reality is that Pakistan has a trade deficit of $1.5 billion per month and in simple terms means $18 billion per year. In addition, Pakistan has to pay almost $12 billion next year as loan repayment which means arranging almost $30 billion in the next year. Economists say that is a huge amount. And at almost 4.2 per cent growth rate at present and despite all the loans it has lined up, Imran’s government would not be able to arrange this amount.

Pakistan cannot expect buckets of magnanimity every time in the form of Saudi, Chinese, UAE or Malaysian help. The fact of the matter is that the country is broke and cannot sustain itself. In addition to a collapsing economy the huge defence budget along with defence pensions takes away almost 42 per cent of the budget cake. The repayment of loans gets another big slice leaving very little space for development. So, fulfilling of vaulting ambitions of the population regarding infrastructure development is difficult.

Transparency has rarely been a strong point of those who have ruled Pakistan and the people there have been fed on a steady diet of grandiose promises/plans with fudged figures and phoney victories which turn out to be lies with passage of time. Imran knows that he will remain in power only till he recognises the supremacy of the Establishment (army and ISI), does not encroach into no-go areas such as ‘Defence Policy, Foreign Policy, Internal Security Policy and Nuclear Policy and their Budget’ and thus keeps the Establishment pleased and happy.

In case he commits the cardinal sin of ever annoying the men in khaki, the days of his government would be numbered. People in general are realising that not much can be expected from him after the way he has taken decisions. His government remains euphoric because Imran’s Debt Diplomacy has succeeded for the present and given his government some breathing space. How far it helps him in future only time will tell.

The writer is a senior IAS officer of the Punjab Cadre and is working as Secretary to Government of Punjab