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Monday, July 15, 2024

Has IMF blamed PMLN for economic mismanagement?

While opposition parties denounce PTI government's deal with IMF, the press release of 12 May 2019 issued by the international monetary body reads like a strong condemnation of the economic policies adopted by the PMLN government.

Islamabad – While Pakistan’s opposition parties – lead by former Prime Minister Nawaz Sharif’s party, PMLN – have vociferously rejected the IMF bailout package saying the package has been provided under strict conditions and people would now face unbearable inflation, it appears that IMF has blamed PMLN for the economic mismanagement country is currently facing.

Pakistan Muslim League-Nawaz Spokesperson Marriyum Aurangzeb said: “The deal of IMF with the IMF has been successful and now an inflation bomb will be dropped on the people of Pakistan. Imran Khan, you handed over the country to the IMF for just $6 billion.” Ahsan Iqbal, former Deputy Chairman Planning Commission and former Interior Minister, demanded in National Assembly that IMF package should be brought and discussed in the parliament before its finally approval by the government.

Read more: The Penny drops for Pakistan as IMF Package hits markets

Pakistan Peoples’ Party (PPP) senior leader Khursheed Shah said that unbearable inflation will be seen in the country following the deal with the IMF. While hoping that the ‘tsunami’ will not make the people slaves of the IMF, PPP’s Sherry Rehman said: “It seems that a tsunami of inflation will emerge out of the IMF bailout package.”

Also, Jamaat-e-Islami Ameer Senator Sirajul Haq said that “the government has bowed down to the IMF’s condition of imposing more taxes. The people of Pakistan will become the IMF’s slaves after the agreement while it will also increase the gas, electricity and oil prices.”

Read more: Pakistan’s Self-defeating economic thought process

Meanwhile, the vice president of Pakistan Muslim League–Nawaz (PML-N) Maryam Nawaz has criticized the agreement between the government and IMF.

“IMF or no IMF – the incompetent rulers were not sure. Finally when it does come, it’s a complete sell out of our sovereignty and rightly REJECTED by stock market. After just 9 months, country is on the brink of economic disaster,” Maryam tweeted on Monday.

Within nine months the incompetent government had brought the country to a complete economic collapse, she said. “The masses are suffering while rulers enjoy perks & privileges. All sectors of the economy stand at the verge of disaster. The experiment has miserably failed.”

Has IMF Blamed PMLN for Mismanagement? 

While PMLN leaders have pounced upon the IMF deal as a historic failure of PTI government, there were many in the government and policy circles in Islamabad and in banks and markets in Karachi that noticed the unusually harsh language IMF press release used to describe the actions of previous governments which can mean both PPP and PMLN but under the circumstances it looks like directed more towards the last incumbents in power ie PMLN.

IMF press release stated:“Pakistan is facing a challenging economic environment, with lackluster growth, elevated inflation, high indebtedness, and a weak external position” but it does not stop on describing this scenario, it offers its causes when it goes not to say: ” This reflects the legacy of uneven and pro-cyclical economic policies in recent years aiming to boost growth, but at the expense of rising vulnerabilities and lingering structural and institutional weaknesses”. And then IMF changes tone when it describes the actions of current PTI government. It says:” The authorities recognize the need to address these challenges, as well as to tackle the large informality in the economy, the low spending in human capital, and poverty..”

WhatsApp and Facebook were alive from early morning in Pakistan discussing these lines from IMF. One senior banker, familiar with workings of international organizations and who wants not to be quoted in name, found these lines overtly political in describing the economic policies and failures of PMLN. Another Karachi stock broker thought that IMF has made it clear what it finally thinks of the financial wizardry of Ishaq Dar. While others are concerned that why IMF remained silent when Dar and his mentor Nawaz Sharif were in power and calling shots.