PM visit to US and IMF


Muhammad Usman

THERE is no secret about it that real purpose of IMF and other world financial institutions is to pave way for advancement of interests of big powers which have leverage on their existence and functioning. The bigger the leverage, the bigger is the influence. At present, it is the US which holds a commanding edge in relation to other big powers on this score. Recent staff report of IMF about economic plight of Pakistan may implicitly provide insight to this postulation. In its report, without directly naming two governments of PML (N) and PTI, IMF has held both of them responsible for misaligned policies and inadequate actions for severity of economic challenges the country is subject to. These include lax monetary policies, indifference to large fiscal deficits, flawed defence of overvalued exchange rate, fuel consumption, short term growth, mainly import driven and lacklustre structural reforms.
Resultantly, these steadily eroded macroeconomic buffers, increased external and public debts and depleted international reserves. In FY 2018, surge in fiscal deficit reached at 6.5% of GDP, 2.5% higher than budgeted while pushing public debt to 75% of GDP. These are punishing statistics, however, IMF was not so explicit when economy of Pakistan was being wrecked under government by PML (N) and PPP during last decade. It completed IMF programs with them without much hue and cry. The government of PTI cannot be blamed for the disaster. At worst, this could only be censured for not having salvaged the wreckage so far. There is a background to it. In 2007, under Pervez Musharraf, Pakistan was quite sound economically as well as on other accounts because of overall steady progress, growth and development in the country. In response to US’s mantra of Do More, once Pervez Musharraf declined to toe their line.
During an address at NDU, he retorted that no one could do better what Pakistan has done in fight against terrorism internationally. If it is not satisfied, it could bring somebody else in our place. Generally a country responds to a big power like US in such tone and tenor when it is sufficiently strong internally. Probably this rung alarm bells in the US and it decided to weaken Pakistan in order to get its interests served tamely from Pakistan. The modus operandi adopted was to replace Musharraf with someone who could bring Pakistan down. Their choice fell on duo of Benazir and Nawaz Sharif who were living abroad at their own accord and had proven record of weakening Pakistan under their respective stints in power. The US got both together under its umbrella for marring up. Eventually, Charter of Democracy was signed between both under its auspices. Both were to rule Pakistan turn by turn. First turn was of Benazir. The luck did not allow Benazir to play her part and instead Zardari occupied the saddle. A numbskull Zardari was even more suited to the US in accomplishment of its ulterior scheme. Under Zardari and Nawaz Sharif, country broke materially, morally and socially immeasurably. In economic terms, every driver of national economy nose-dived and debt soared to insurmountable level; however, IMF and other financial institutions/watchdogs raised no serious reservation or took action as it is being done now rather, painted a satisfactory outlook because underlying purpose was a weakened Pakistan. The whim and fancy of US hoodwinked the reality.
The reality also did not dawn on Imran Khan with its full grim implications before he assumed the Prime Minister Office. The Pakistan was at brink of default. Despite transfusion of quite generous financial help from friendly countries, economy of Pakistan refused to step back from edge of the precipice because agreement with IMF is considered central to other international lending and it was in no liberal mode. Inevitably, he had to go on level of IMF chief to get the bailout deal however, situation is likely to change favourably because of rapprochement with the US on the horizon. With change of heart by US, IMF could also switch over to amenable mood. During his visit to the US, Imran Khan has already met chiefs of IMF and World Bank with possibility of rescheduling of loans in air. In league with US, earlier also, Pakistan bought money and time but squandered it in sea of corruption, complacency and indifference to imperatives of real and sustainable growth and development. With proverbial last straw on camel back, Pakistan could no longer afford to let possible opportunity go down the drain once more. No more prodigal approach is the path. This lies in a growth which generate further growth. No while elephant living off state’s subsidies is endurable. The increase in overseas earning hands by human resource development is another avenue. The corruption, neglect and apathy have to banish from our alleys and power corridors. These need to be replaced with hand work, selflessness and pain in heart for national cause. Our debt liabilities seems awesome in isolation but when seen in context of a nation of 220 Million talented, hardworking and resilient people with rich natural resources, these tend to lose its intensity and ferocity. Other nations, far less gifted, have done it. Only precondition is same conduct as they demonstrated in challenging times. With government imbued with spirit of change, portents in our case also seem far positive than ever.
— The writer, a retired Lt Col, is freelance columnist based in Islamabad.