IMF: Army Chief’s pragmatic intervention
THERE can be no denying the fact that the Pakistan Army is an important stakeholder as far as our national interests are concerned—particularly in matters of our economic security — the core of our national security.
The latest statement — of the Chief of the Army Staff (COAS) General Qamar Javed Bajwa — soliciting the Biden Administration to use its leverage with regards to the matters relating to the Pakistan-IMF agreement—holds a significant clout.
According to security sources, the COAS phoned the US Deputy Secretary of State Wendy Sherman earlier this week.
The army chief made an appeal for the White House and Treasury Department to push the IMF to immediately supply nearly $1.2 billion that the country is due to receive under a resumed loan program.
The IMF has already reached staff-level agreement with Pakistan for the loan in question on 13 July.
Yet the transaction – part of the IMF’s $6 billion Extended Fund Facility for Pakistan — would be formally accorded subject to the final approval by the multilateral lender’s executive board.
Currently, the IMF remains under the recess period for the next three weeks and its board would not convene until late August.
But no firm date has been yet set for announcing the loan approval for Pakistan, according to an IMF official who also spoke on condition of anonymity.
‘’The source said the military had to take the initiative when several backdoor moves from the civilian side did not yield immediate results.
Pakistan’s army has long had an influential role in policy matters in Pakistan.’’ Pakistan and the IMF originally signed the bailout accord in 2019.
But the release of a $1.7 billion tranche has been on hold since earlier this year, when the IMF expressed concern about Pakistan’s compliance with the deal’s terms under Imran Khan.
Prime Minister Shahbaz Sharif-led government reached a preliminary agreement with the IMF earlier this month to revive the bailout package.
That agreement was subject to approval from the Fund’s Board of Directors. Pakistan had anticipated a quick revival of the bailout, but the IMF has so far not released the much-needed installment, which may have prompted Bajwa’s call to Washington.
‘’Pakistan desperately needs the IMF loan. Earlier in July, the Fund said it would raise the value of the bailout from $6 billion to $7 billion, if approved by its executive board, usually considered a formality’’.
Apparently, the Government is trying its level best to prevent the economy from tumbling into economic and financial crises as the time is running out for the present government to find a way out of the economic crisis.
Pakistan’s civilian leadership has also separately contacted the US’ top diplomat in Islamabad, seeking his help to unlock another $1.4 billion funds from the World Bank and the Asian Infrastructure Investment Bank (AIIB), as per the findings of a top government functionary.
Reportedly, separate meetings between senior civilian Pakistani and American officials were held earlier this month, adding that the COAS appealed to the US when the civilian officials could not manage to negotiate an early disbursement of funds.
Every Dick and Harry knows this truth that the US has had profound influence over the Bretton woods Institutions — the World Bank and the IMF.
Arguably, the sweeping ability of Washington to draw on the Fund itself is not merely a theoretical proposition.
The United States has borrowed foreign currencies from the IMF on 28 different occasions, more than any other country.
The IMF has always been a two-way street for the United States and the Administration’s analogy with a credit union is apt.
The fact remains that the IMF protects the forces of neo-liberalism. The IMF structured dynamics are squarely of a complex nature.
An IMF program breeds on an external financing that binds the crisis country over an intermediate period that permits gradual rather than abrupt phase in of the adjustment measures.
The stipulations imposed by the IMF program require the country to employ sound, market-oriented measures rather than quick fix controls.
Moreover, the penetrating influence that Washington has been infusing on the developing economy via IMF needs no explanation.
As for the Army’s strategic role vis-à-vis economic security, Pakistan’s Army is always active in protecting our economic security.
In the post Covid-19 phase, our Army Chief remained highly proactive and during 2019-20, our Army chief General Qamar Javed Bajwar remained vigilant for securing economic aid from the Gulf States.
Moreover, Army played a significant role regarding the matters related to the CPEC. In today’s world in order to promote the soft power tactics, military diplomacy has become even more crucial to achieve national objectives like economy, diplomacy and security as these three factors are interwoven.
Consequently, three strands— economy, diplomacy and security all depend on each other to achieve “soft power” goals of the state.
The role of militaries then extends beyond the conventional hard power domain and puts them in supplementing national efforts as well to achieve national policy objectives.
And yet, considering the state of Pakistan and its geopolitical importance. The military diplomacy synergy has played a pivotal role in revitalising our relations with foreign countries.
The concept of national security has been organically attributed to economic security. This manifesto remains the quintessence of the Bajwa Doctrine and undeniably, this is true about the US-Pakistan relations, wherever there has been need, our army has been playing its required role to mend the fences with the US.
Pakistan-US relationship can be characterized by a catch-22 situation wherein both the states have had no alternative other than to manage their relationship.
The latest developments in promoting Pakistan-US trade relations depict this growing exigency of finding new ways and means to strengthen their relationship.
It is here that late on Friday, Bajwa also spoke by phone to General Michael Erik Kurilla, the commander of the US CENTCOM.
Nevertheless, the most pertinent truth is that later or sooner, the IMF aid package will be granted to Pakistan but the quandary the government faces is: how long will we be depending on the IMF Aid program that is actually a recessive model?
Whereas the economy of Pakistan fairly requires an expansionary model based on short and long term planning.
The current economic challenge of balance of payment cannot be rightly addressed as long as our current account and budget deficit remain highly defaulting.
The continuous debauching of our currency is a fatal sign for our economy. Time has come that the economic policy makers must exercise strong deliberations based on objective economic reforms that could serve as a panacea to redeem us from the ailing economy.
—The writer, an independent ‘IR’ researcher-cum-international law analyst based in Pakistan, is member of European Consortium for Political Research Standing Group on IR, Critical Peace & Conflict Studies, also a member of Washington Foreign Law Society and European Society of International Law.