Finance: Looking for more to export

Pakistan has pledged to the International Monetary Fund (IMF) that it will “further strengthen institutional capacity to fight corruption and significantly reduce trade barriers to support inclusive growth and a level playing field for business and investment.” This statement is part of the press release issued by the IMF on March 25, announcing that it had reached a staff-level agreement with Pakistan, which will now have little to no room to incentivise its export industries by imposing tariff and non-tariff barriers against imports. Moreover, “strengthening institutional capacity to fight corruption” may also weaken the bureaucracy-industrialist nexus, which has long provided undue patronage to select, often politically connected, export-led firms, shielding them from competition. Supporting “a level playing field for business and investment” should also imply making industries more efficient rather than allowing them to survive within a protected environment of import restrictions.