DRAMATICALLY rising from the ashes of its predecessor, a phoenix,in ancient Greek mythology, is a bird reborn after catastrophe with more strength and power.

After posting 49 months of back-to-back current account deficits, Pakistan's economy suddenly posted a surplus. The stock market rose by over 8,000 points in the last few weeks.

One billion dollars of hot money poured into the country but is a clear sign of confidence in the stablisation of the economy.

Is New Pakistan's economy about to rise like a phoenix or is this a mirage?

The present government after it came to power, had to administer chemotherapy to fight the cancer of twin deficits ripping the economy. The chemotherapy had painful side effects in the shape of inflation and devaluation.

However, months later, the first positive signals are palpable. The cancer of deficit is crumbling under the treatment's sustained pressure; the current account deficit is finally under control.

The reason this is a great news is because reducing the current account deficit  is the only way to break out of the debt cycle with the IMF. The reason every new government rushes to the IMF is because the net outflow of dollars from the country exceeds the net inflow.

If a country can keep its deficit to the minimum, it will transform the very nature of the economy and boom and bust cycles.

Pakistan's economy didn't shrink under the present government, it just grew at a slower pace. And now that pace is picking up. There's still a long way to go for Pakistan's economy to perform at its peak but the country and its economy are headed in the right direction.

The World Students Society thanks author M Bilal Lakhani/ a recipient of  of the James A Wechsler Award for International Reporting and a graduate of Columbia University's Graduate School of Journalism.


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