By Abdul Wajid Khan ISLAMABAD, April 21 (INP-WealthPK): Pakistan cannot disengage with the International Monetary Fund (IMF) in the prevailing situation of economy, and it immediately needs revival of the IMF program for the balance of payment support, according to a top economist. Dr Sajid Amin Javed, research fellow at Sustainable Development Policy Institute (SDPI), in an interview with WelathPK said Pakistan needs to resolve the prevailing political crisis as soon as possible because it is creating massive macroeconomic risks. He said political instability distorts all policy plannings including economic forecasts and vision, and hence it creates adverse economic implications. “Currently, macroeconomic crisis in the country is at peak, foreign reserves are declining, which is creating pressure on Pakistani rupee. We need a strong and stable government to manage internal and external balances,” he said. Dr Sajid said steps are needed to contain current account deficit because an additional $5 billion to $6 billion will be required till the end of ongoing financial year. He said, the 7th review of the IMF program was technically on halt due to the political crisis as the Fund in its statement said it will wait for the policies and intentions of the new government regarding economic stability. He said engaging with the IMF will be a challenge for the new government. “In the prevailing circumstances, we cannot disengage with IMF at any cost. IMF always encourages to increase social spendings, and the government should renegotiate about it,” Dr Sajid Amin said. “Now the new government has a short period to deliver because it seems the next elections are near. So, it will be difficult for the present government to take structural reforms for the economy. In the current circumstances, the government will not be able to take decision to unfreeze petroleum and energy prices keeping in view the political considerations,” he pointed out. On the other hand, if the government focuses too much on stabilisation, it will negatively impact the ordinary people. Economic performance will depend on how successfully the government will correct the internal and external economic balances. “We need to correct our fundamental economic structure and transform the economy from consumption to investment, import to export and economic inclusion,” he said. The IMF Resident Representative in Islamabad Esther Perez Ruiz confirmed that the new government in Pakistan has reached out to it, seeking support for the country’s balance of payments. She said a delegation of the country would be in Washington this week for a follow-up meeting. Dr Sajid suggested that the government needs to focus and implement five priorities at this stage: first, the government needs to create a balance between correction of internal and external balances and protection of general public from negative impacts of stabilisation. Hence, a balanced policy is required and extreme tilt to any side will be harmful; second, top priority should be given to controlling inflation because there is not any other way to provide relief to the public; third, the government should not discard good policies of the previous government; fourth, social protection program should be expanded immediately to counter the negative impact of stabilization and its disbursement should be made on a monthly basis; fifth, the government should support the State Bank of Pakistan (SBP) Amendment Act and it should not be rolled back, however it can be further improved. “In the current circumstances, we cannot artificially strengthen rupee because foreign reserves are very low and it will be unfortunate if the government adopts such a policy,” he said. He further highlighted that politics should be avoided and there should be focus on provision of relief to the general public.