A recent loan package of $5.3 billion to Pakistan by the International Monitory Fund will enable transitory relief to Pakistan’s new government and its limping economy, but Pakistan’s long-term economic solutions cannot be solved by frequent loans from international organizations and foreign aid from friendly nations such a s the United States, Saudi Arabia and China. Economic principles are no different whether it involves a national or personal economic situation and securing loans and foreign aid is not a permanent solution in either situation.
Of course, loans and foreign aid, in particular, are valuable tools to fix short term pecuniary predicaments, provided the money is managed correctly, but sustainable economic growth is the only answer to avert future financial tribulation and that should be the priority of Pakistan’s new government.
Pakistan’s chronic dependency on foreign aid and international organizations like the IMF and the World Bank is well documented. The United States has been providing foreign aid to Pakistan since the early 1950s and the IMF and various Pakistani governments have worked out and then abandoned a number of financial arrangements in the last 30 years. There is absolutely nothing wrong in seeking IMF assistance and accepting foreign aid from friendly countries in order to strengthen a nation’s economy and relax short-term fiscal vexation. There are several examples confirming that a number of countries took advantage of IMF assistance to revitalize their economy and managed to attain robust economic growth.