What the IMF loan brings in its wake?
By Waheed Hussain
The United States and the Chinese are fighting trade war to protect their respective countries’ economies. There is a trade gap between the two world economic powers. The US has total 360 billion dollars’ bilateral annual trade with China; however, the problem with the world sole supper power is that it has a trade deficit of 160 billion dollars’ with Chinese. Every year America has to pay extra hundreds of millions of dollars as import bill to China. This puts a great pressure on the American economy. For reducing this giant trade gap, it wants to slap Chinese exports to US with heavy duties and taxes. The objective is to discourage Chinese exports and save billions of dollars.
Is Pakistan a victim of same “economic-trade war” policy initiated by regional and world powers? Partially yes, because successive governments in Pakistan have failed to protect country’s economic interests and this criminal attitude gave hostile nations a chance to launch overt and covert economic operations to turn Pakistan financially a weak and beggar state. Please remember, “The beggars are no choosers.”
Reference to IMF-Pakistan talks we are the beggars and IMF is the lender, the realistic approach will be to accept all its justified and unjustified demands, as long as its opening up purse for our begging bowl.
Today, we as a nation are struggling for economic survival. The government is exploring various options to meet the current account and budget deficit. There is a huge gap between income and expenditure of the state. The financial short fall has bitterly shaken the confidence of government to continue development work on projects being launched by the previous governments and at the same time introduce the new one. It’s a matter of common understanding that lack of business activity hampers job opportunity and economic growth. Because of swelling budget deficit, low revenue collections, financial mismanagement of state owned organizations, ballooning circular debts, and current accounts deficit, the country is in extremely difficult situation. There is a financial pressure on the government and the same is being directly diverted to the masses. To address the issue of financial shortfall PTI government increased the prices of gas, electricity, petroleum and medicines products. The punishment for the consumers did not end here; prices of all daily used and other items were also automatically increased.
The moment PTI took power last year it introduced many new taxes. Today the food as well as overall inflation is at an all-time high. Every segment of the society is being hit badly. From daily wages to the salaried class everyone is questioning the logic behind this madness. Opposition parties and the economic and financial experts were of the opinion that prices were raised to achieve $ 6 billion three years’ bailout package from the IMF. Partially true, however, fact of the matter is that the issue has been bigger than the IMF! The IMF gurus were in the town for talks. What was being discussed would never be disclosed and shared with helpless public. Historically speaking, on foreign loans, no previous governments did ever bother to take nation into confidence and Prime Minister Imran khan’s battalion would repeat the same tradition. The government would never disclose what understanding was being agreed with the Monetary Fund. Due to this secretive approach of the Imran government critics are saying that ‘IMF team from Pakistani side was holding talks with the IMF team from Washington.’ It was a friendly IMF vs IMF match. The losers are the people of Pakistan. The public will never know what went wrong with IMF and would be forced to earn less and pay more.
The new budget next month would tell the whole hidden story. Like previous governments PTI government also found an easy solution to tax poor and low-income segment of society. The rich and powerful had been part of the power politics and they would not pay even a penny to the government.
Interestingly PTI was a ‘Justice party’ and this was the best justice it could do to those helpless who voted for them in the last general elections. Pity those who were dreaming for a change. Were the people aspiring for this kind of change? The one, which made them poorer. Due to growing financial pressures masses were suffering from bitter anxiety and depression.
Should we accuse IMF for all financial and economic ills in the country? Has IMF asked corrupt politicians and bureaucrats to plunder nation and launder money to foreign banks. Has IMF asked successive governments to pump money into inefficient Public Sector Enterprises without accountability? Finally, who requested the IMF for the fresh deal? Imran khan was so desperate that he has to change the whole economic team including the finance minister. People were not told what wrong Asad Umer has committed to the country and if so, why he was not punished?
So, we should stop blaming the International Monetary Fund for the entire price hike etc. It is an international financial agency and will go according to the book.
When a father lends a hundred rupees to his son, he asks him how the amount would be spent. Similarly, when a brother lends money to his real brother, the question is raised about retuning of the same amount in due course of time. Even the local banks have stricter lending policy. So the Fund would protect the interest of those powers or countries whose dollars are with the IMF.
The most important aspect of the entire new IMF program is that it will impose fresh taxes on public. Naturally, that will further burden the low-income class. Unfortunately, the PTI government has no options and no solutions to the economic problems other than deviating from all its pre-poll promises. Whatever Imran Khan used to say while he was in opposition, he is doing exactly the opposite of that. It’s the only “Tabdeeli” the masses have witnessed so far.