Prime Minister Shehbaz Sharif has accused PTI leader Imran Khan of conspiring to obstruct revival of the stalled deal with the International Monetary Fund (IMF) and Finance Minister Ishaq Dar hopes to sign a staff level accord with the Fund during this new week. An agreement would release $1.1 billion, which is part of a $6.5bn bailout package the IMF approved in 2019, which analysts say is critical if Pakistan is to avoid defaulting on external debt obligations.
The government eagerness to conclude a deal with the IMF is understandable as the delay is badly affecting economic interests of the country in many ways. Apart from its catastrophic impact on exchange rate and economic activities, international credit rating agencies have downgraded the country due to a high risk of default. The ongoing political instability in the country is being attributed, as the reason for delay in revival of the IMF programme and therefore, it is responsibility of all political parties to demonstrate maturity as far as handling of economic challenges was concerned. PTI must realise that original agreement was inked when it was in power and therefore, politics should not be done over core economic interests of the country.
As for final outcome of the ongoing engagement with the IMF, government has completed all prior actions demanded by the Fund for resumption of the programme yet in given situation nothing can be said with certainty as the IMF has been putting new and fresh demands every now and then taking full advantage of economic and financial vulnerabilities of the country.
The government hands seem to be tied so tightly that it cannot initiate any plan or programme to provide relief to inflation-ridden people and there is a widely held perception that governance has virtually shifted to the IMF. This perception about government has also been strengthened due to lack of a firm administrative strategy to curb artificial price-hike and shortages. Price-hike on account of massive devaluation of rupee, wholesale increase in electricity and gas tariff and frequent upward revision of prices of POL products besides levy of taxes on these products is understandable. However, devaluation itself has become an enigma as rupee-dollar parity is openly manipulated by vested interests and government is unable to check rampant smuggling of dollars to neighbouring countries, especially Afghanistan.
Even commercial banks were found involved in manipulating currency rate to earn windfall dividends yet government is shy of taking action against them for reasons best known to the SBP and other decision-makers responsible to check irregularities. Prices have also been increased on the pretext of a temporary ban on opening of letters of credit and non-clearance of consignments at Karachi port. However, it is all the more intriguing that prices of even those products have also been increased, which are either not dependent on imported raw materials or government timely cleared imports, poultry prices being one of the glaring examples of malpractices by unscrupulous elements.
Prices of all items have been jacked up disproportionately and there is no stability in sight as prices go up on an almost daily basis, making lives of the people miserable. Under these circumstances, the country might benefit in some respects after finalisation of the deal with the IMF but harm done to common man seems to be irreversible, especially in the face of political instability and administrative weakness of the government.
