HERE we go again. Having succeeded in stabilising the economy and failed at reforming it, the government is not preparing to transition to high growth the old fashioned way: through borrowed dollars procured as a geopolitical rent against services rendered.

A couple of things have happened. Most recently, we have the announcement that Finance Minister Muhammad Aurangzeb met the US treasury secretary and ‘asked’ for a $10 billion swap line from the Exchange Stabilisation Fund, the same fund from where the Trump administration gave a $20bn swap line to Argentina in October last year. Argentina drew $2.5bn from the fund for a few weeks then zeroed it down by December, and has made no further drawings from it since.

In April, President Donald Trump announced that they were in talks with the UAE for a similar facility, and that a number of other Asian countries had approached the US with requests for the same. That is when word first began to circulate that Pakistan may be among those Asian countries. Now that word has been confirmed.

On other fronts, the government is building a powerful borrowing capacity with the purpose of pulling large quantities of dollars into the system with which to kick-start a growth process. In April, for example, when the UAE called in their deposits of $3.4bn with the State Bank, the funds were returned to them and within weeks $3bn were deposited by Saudi Arabia in the finance ministry. This was an interesting procedure. The outflow to the UAE reduced the State........

© Dawn