DESPITE the fact that Pakistan is one of the countries affected most by ongoing conflict between the United States and Iran, the International Monetary Fund (IMF) continues with its same old policy of increasing pressure on Pakistan to accept both due and undue conditions for continuation of its fiscal package for the country. It has placed eleven new conditions for approval of next tranche of $1.2 billion. It is also expected that the IMF mission will visit Islamabad next month in order to finalise the budgetary and fiscal framework with the Ministry of Finance for upcoming budget.
IMF interference in budget-making process and some of the conditions convey a clear impression that the country has virtually lost its economic sovereignty. It is regrettable that on the one hand Pakistan is shining on diplomatic front because of its effective mediation in the Gulf war and its ability to maintain cordial relations with almost all influential capitals yet on the other hand it is experiencing tough conditions of creditors because of its fragile economy. The present elected government is in the midst of its term, which means it needs to come out with comprehensive policies and programmes to provide genuine relief to masses, who are hard-pressed due to price-hike, unemployment and lack of developmental activities. It is unfortunate that IMF is poking its nose in almost every aspect of governance, prohibiting the possibility of provision of any relief to people of Pakistan. Both electricity and gas tariffs are already highest in the region making them one of the major factors of rising cost of doing business yet IMF is pushing for upward revision of tariff effective from next financial year.
Similarly, demand for liberalisation of foreign exchange regime also means further inflationary pressure. Under another term, all fiscal incentives given to Special Economic Zones (SEZs) under the China-Pakistan Economic Corridor (CPEC) will be abolished by 2035. Progress on establishment of the agreed SEZs is already slow and revision of their terms and conditions will raise question marks about their fate. The government also agreed with the IMF under a new condition that stipend under Benazir Income Support Programme (BISP) will be increased from Rs.14,500 to Rs.19,500 from January 2027, so the allocation of the BISP will be increased in the upcoming budget for 2026-27. On the face of it, this seems to be a pro-poor measure yet in reality we are giving permanence to dependencies whereas there is a serious need to create job and economic opportunities.
