| When prime minister Nawaz Sharif came to power in February, Pakistan's balance of payments deficit was out of control, it had lost the trust of the IMF, and its fiscal situation was so serious that default on loans to international lenders seemed inevitable. Five months on, Pakistan is on the slow path to economic recovery. Reserves have improved, morale in the private sector is higher, and the IMF appears on the brink of extending further funds. Pakistan is back in the fold of financially respectable nations. The turnaround has been accomplished by a government committed to stimulating business and the private sector at the expense of the state-owned entities. A programme to curtail government and bureaucracy, tackle corruption, and speed up privatization won over the financial community. "We have some hope at last," says Rubina Atif, deputy secretary at the Karachi Stock Exchange, which rose 7% in the days following the arrival of the new government. Adds Sajjad Razvi, Citibank's country manager: "There is a lot of onus on the private sector. The government has done its bit for recovery. Now business must reciprocate." This it has done, to a limited extent, in responding to prime minister Sharif's request for funds to help stave off economic collapse. |