IMF programmes are sugar coated baits for coun-tries striving to resuscitate their economy. They lend money to developing countries to feed their own interests and gains by focusing on short term prob-lems instead of long term permanent solution.
Unfortunately, lately Pakistan has got into this trap too, to the extent that now SBP operations have even been handed over to IMF. We had been under immense pressure and were struggling to cope up with our economic crisis but now it has escalated to a point where it appears to be a threat for our inde-pendence. We are the only nuclear power country, where IMF holds authority on complete monetary operations. Ever since Pakistan has rolled out its nuclear program it wasn’t cherished by the West and now due to SBP bill approval we are on thin ice.
On 1 July 1948, FOUNDER of Pakistan Mr M A Jinnah delivered a speech and said “opening of State Bank of Pakistan symbolises sovereignty of our state in financial sphere”. But it’s obvious that, our incumbent government, opposition and espe-cially Leader of the Opposition in the Senate, Syed Yousuf Raza Gillani are oblivious of this historic and meaningful opening statement.
There has been a lot of hue and cry about SBP autonomy bill and was being widely discussed on National broadcast channels, print, social media. Lot of awareness has been generated on this issue and the possible implications of accepting these condi-tions. Initially PM Imran khan resisted going to IMF but then due to unforeseen reasons had to compro-mise on our sovereignty. Now we are constantly raising taxes to keep up with our repayments while we could have done all this initially without further damaging the economy and surging our external debt to $127 billion (FY21) from $90billion in 2018.
Clearly we were not in irrevocable state and could have utilised other avenues. Former member of PM’s Economic Advisory Council Dr Ashfaq Hassan, Pakistan’s renowned economist and Dean of NUST told in his interview that he gave the Prime Minister of Pakistan a proposal to raise $17billion to curb our CAD(current account defi-cit)issue, in order to avoid IMF. But unexpectedly Government could not implement those projects .The question is if eventually we had to raise taxes to generate revenue, why did we go to IMF, just so that we can depreciate our currency, increase inter-est rate and eventually balloon up our debts?
IMF programs have four main elements, tight monetary and fiscal policy, market based exchange rate and higher interests and all these components are implemented on a country because repayments are more important than improvement. We have seen that how religiously these pre-conditions were met this time in order to protect IMF’s welfare.
Country like Ghana is better than us at least they have a sense of realisation that how much damage, IMF can cause to a country. Ghana’s government has decided to increase taxes so that they can avoid going to IMF, they have increased 1.75% E-levy on digital transactions which will help reduce fiscal deficit by more than 14% for current fiscal year. If such measures were taken earlier it must have been savoured by large majority and current state of af-fairs would have been different as well.
Then we have another example of Sri Lanka, where they are considering going to IMF but have clearly stated that not every condition put forward by IMF will be accepted. Our previous IMF package was completed without surrendering any power. So now why have we given up on our autonomy?
Seventy per cent of our economy is based on ag-riculture, a country which is rich in natural re-sources but instead of making policies that will eventually boost exports we are investing in several real estate projects which has reduced our arid land, white washed black money and promoted capital-ism. Our Finance Minister Shaukat Tareen recently said that we need to achieve 5% growth and then economy will revive. Our GDP was at 5.5% in 2018 but made to fall below 0% by the help of different amateurs finance ministers, which led us to current IMF bailout package.
IMF packages are not a treat but trick in dis-guise, country has to be vigilant about the pre-conditions. For all those who have been part of this deal are certainly not on the right side of the history. Our pride was our very own SBP and not NSBP. Last but not the least who will reap the benefits of new autonomous State Bank, us or IMF?
[Saadia Saadat @Saadiasaadat1 Freelance, Lon-don based Columnist]