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Thursday, January 26, 2023
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IMF’s new conditions for Pakistan – “Do More”

With the start of the current 22nd program, Pakistan was asked to take tough measures, like the appointment of the Governor of the State Bank, and its high degree of autonomy, removal of subsidies, and burdening the nation with heavy taxes. The price hike and inflation were a by-product of IMF conditions.

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The current IMF program is 22nd, but it is different from previous all 21 programs. All previous programs were with the support and blessing of the US, as we enjoyed very close relations, either during the cold war era or the Afghan War against the former USSR’s occupation of Afghanistan in the 1980s, the war on terror, etc. Pakistan was in the US club, and political support and goodwill were with Pakistan.  However, this time, the scenario is changed completely.

The US blames Pakistan for its failure in Afghanistan and is annoyed with its close ties with China. Washington has shown displeasure on PM Imran Khan’s visit to Moscow. Its opposition to BRI and CPEC is a major point of disagreement. Pakistan’s refusal to join the anti-China campaign was not digested by Washington. So we have not only lost American political support in the IMF but, have been coerced through its hard conditions.

As a matter of fact, the UN, and many International institutions were created after World War II, under the US hegemony and are under its influence. The US is using these institutions to coerce and pressurize adversary nations and countries. These are being used as a political tool to achieve their political goals and objectives.

Read more: Pakistan still needs to do more for IMF payout

Is there a political agenda behind IMF conditions?

With the start of the current 22nd program, Pakistan was asked to take tough measures, like the appointment of the Governor of the State Bank, and its high degree of autonomy, removal of subsidies, and burdening the nation with heavy taxes. The price hike and inflation were a by-product of IMF conditions.

The IMF’s intentions are very much visible that once we come closer to fulfilling its requirements, additional demands are imposed. It seems, the same American approach “Do More” is exercised with Pakistan through IMF in a new style. We did a lot, and tried our best to meet all the demands of IMF, but, never-ending demands are coming up from time to time. Some of their demands are against our national interests or beyond our capacity to meet them. As a result of its demands, the fuel, electricity, gas, and food prices have increased to an unfordable stage, with no precedence in the history of the country.

For example, it has asked the government to sign an MoU with the provinces to jointly produce a cash surplus of Rs750bn to help Islamabad meet the condition of keeping the consolidated fiscal deficit for the next year at around 4.9pc of GDP. Then, the Fund wants the government to present the plan to impose a petroleum development levy of up to Rs50 a liter on fuel to the cabinet for its approval to meet an enhanced PDL target of Rs855 bn before concluding the deal. Likewise, the IMF wants a series of structural benchmarks such as the increase in electricity prices to be implemented prior to finalizing the staff-level agreement.

Read more: IMF delivers targets ahead of restoring Pakistan’s bailout deal

Finance Minister Mr. Miftah Ismail told that Pakistan has received economic and financial targets from the International Monetary Fund (IMF) that once agreed and ratified should pave the way for a multilateral lender to unlock a suspended bailout program. It was a hope for the early release of badly needed funds immediately.

It seems that the political government is repeating old strategies like condemning American Drone Attacks publically and under the table facilitating them. For drone attacks, they needed ground intelligence and this was not possible without the consent or support of the Government.

It is urged to share with the public the facts and truths if IMF is satisfied or not?

If we will get these funds or not? How long we will be a victim of “Do More”? How much burden will be put on the common man’s shoulders? How many difficulties will be made for us? The nation is capable of scarifying and coping with hardships, but, it is urged that the politicians should share the facts and truths, in full sincerity.

It is strongly recommended that all other options must be kept open, instead of relying only on IMF. As we are afraid, the IMF may not rescue the nation in time and keep on delaying with new conditions, one after another. Keeping all eggs in one basket is never recommended.

Read more: Shaukat Tarin reveals IMF and government deal

Pakistan is a nation of 220 million and blessed with rich natural resources, it is not a poor nation, but rather poorly managed. Reforms and merit may transform the country into an independent proud nation.

 

 

Prof. Engr. Zamir Ahmed Awan, Founding Chair GSRRA, Sinologist (ex-Diplomat), Editor, Analyst, Non-Resident Fellow of CCG (Center for China and Globalization). (E-mail: awanzamir@yahoo.com). The views expressed in the article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.