Human Security in Pakistan Based on the above dire consequences of a possible default by Pakistan, the utmost priority from the viewpoint of preserving human security is to avoid such a cataclysmic event. There is the necessity of having the umbrella of an IMF program during this period of acute financial stress as this international financial institution is the ultimate lender of last resort . This will also require adherence to the monetary and fiscal policies agreed with the IMF. 13.2 Policy Instruments to Avoid Default 13.2.1 Promoting Import Substitution The SBP has adopted various measures for restricting imports, like physical controls over import LCs, increasing import margin requirements, and a physical ban on some luxury imports. However, the approach should be to promote import substitution by providing the necessary level of import tariff protection. It may perhaps come as a surprise that Pakistan has over-liberalized its imports. Over two decades ago, the maximum import tariff was 120%. After several downward moves, there are now four import tariff slabs of 4%, 11%, 16%, and 20%. Consequently, the average level of effective protection against imports has come down on average from 134% to 32%. Further evidence of over-liberalization is provided by the fact that the average level of MFN import Tariffs in Pakistan is even lower than those prevailing in India and Bangladesh, as shown in Table 13.1. Table 13.1: Level of MFN Import Tariffs in Pakistan, India and Bangladesh(as of 2021) (%) Agriculture Industry All Pakistan 13.4 10.9 11.2 India 39.2 14.9 18.3 Bangladesh 17.6 13.4 14.0 Source: World Tariff Profiles, WTO. The Table clearly indicates that for all types of items, Pakistan has significantly lower MFN tariffs than India and Bangladesh, even though the trade deficit of these two countries is much smaller than that of Pakistan. Therefore, the appropriate policy for Pakistan is to move quickly towards a regime of higher import tariffs as follows: 108