Prime Minister Imran Khan stated in his October 7th address to the nation that Pakistan might need to resort to the International Monetary Fund to address its hovering balance of payments crisis but would strive to seek funding from friendly countries first.

Since the time he sat on the opposition benches, Khan harshly criticised former governments for turning to the IMF time and again and promised that once in power, he would ensure a self-sufficient and fiscally sound Pakistan. Khan’s electoral campaign posited greatly upon his promises to never “beg” for money from the IMF and to put an end to the vicious cycle of corruption that has bitten every sector of Pakistan like termites. Khan was one of the harshest critics of IMF bail outs and assured to revamp and introduce pressing reforms, inclusive of widening the nation’s taxation net and reforming loss-making state-run enterprises.

However, ever since Khan has sworn in as the Prime Minister and presumed office his policies are leaving investors both at home and overseas very confused. It would be safe to say that given the current power subsidies forcing currency devaluations that aggravate inflation, Khan’s plans are either too idealistic, overly optimistic or just ahead of time. The friction between Khan’s campaign promises to build a social welfare state modelled on the State of ‘Medina’ and Pakistan’s crippling economy is manifesting in great uncertainty deterring investors in the region. This uncertainty has manifested in the offloading of the Pakistani rupee which hit a consequential low followed by hammering the stock market with a sell-off, wiping $2 billion off the index’s value.

Recently, Pakistani officials met IMF representatives in Bali and formally began the process of seeking an I.M.F. bailout worth up to $ 12 billion. If this bailout materializes it will be the 22nd occasion Pakistan will be loaned capital by the fund since 1958 to give the economy room to agitate and grow, while Khan’s government strives to put an end to decades of boom and bust cycles. Even though, the bailout measures up to $12 billion, economists and analysts speculate that the countries gaping financial void may expand as far as $20 billion. This gaping financial void worries investors that the government may not mediate a vigorous deal with the IMF, inevitably forcing the country to resort to Chinese and Saudi loans after taking several billions of dollars’ worth of loans from Beijing this year alone. As per the IMF guidelines that the government adhered to, a free float of the Pakistani currency is speculated translating to a depreciation of the rupee per dollar coupled with hikes in electricity and utility tariffs to meet the cost of production and recoveries.

As important and needed as IMF bailouts maybe, the concern around Pakistan’s economic course is growing and investors are becoming increasingly moot. For any sort of egalitarian, it is important for the new government to pay attention to the intricacies of the political institutions and political power and not divorce either from the public discourse, as any meaningful reforms can only come about if the political structure allows room for it to, hence what we need right now is a rather holistic approach.