Prime Minister Imran khan and his cabinet ministers are referring to IMF quarterly review reports in which IMF endorsed the government policies. IMF seems satisfied with progress made by the PTI government on the implementation of its agreement. The PM Imran Khan and his economic team seem happy to satisfy the IMF. On the one hand- IMF seems satisfied and happy with PTI government’s economic policies.
On the other hand-Pakistani masses are not happy and satisfied with government. The people are not happy with high inflation- out of control prices- expensive electricity-gas and petrol and rising poverty and unemployment. The neo-liberal free market economic policies have made the lives of masses more miserable and painful.
Now the question is why IMF is praising the PTI government when its policies are making the lives of millions of people miserable? Why IMF endorsing the government policies when unemployment- poverty and inflation is on the rise?
There are two reasons. One- IMF forced every government to implement certain policies who seek loan from it. IMF praises every government in the world which implements IMF conditionalities and policies. After entering into an agreement with a government- IMF review the implementation of the agreement on quarterly basis and suggest further measures and policies.
IMF produces quarterly reports and release quarterly installments of the loan on the basis of these reports. IMF stops the installments if not satisfied with the implementation of its agreement and conditions. IMF always focuses on the certain measures and economic indicators. IMF praises every government that implements these policies and takes measures wished by IMF. The main focus of IMF is to make it sure that its loans are secure and paid back according to the agreement.
Two- IMF never focus on the economic conditions of masses. It shows hardly any concern regarding the unemployment-poverty- low GDP growth and high inflation. It forces the government to cut subsidies- social spending and pro-people policies. When governments end subsidies or drastically cut is-the net result is the increase in food prices. It forced the governments to cut the public sector spending. These policies and measures create more problems for the masses.
Prime Minister is not seems happy with media and some journalists. He is not happy especially with leading economic reporters and analysts. He is not happy because IMF is endorsing the government policies and saying that the economy is going in the right direction. But leading economic experts and analysts are pointing out the impacts of IMF imposed policies on poor people. He wants to hear only good things and positive reviews of his performance.
The IMF is praising the PTI government for implementing the IMF programs. Prime Minister Imran Khan believes what IMF is saying about the economy like the past Prime Ministers and rulers.
Every government gets excited when IMF praised its policies and started to believe that Pakistani economy will achieve high growth and economic development as the result of IMF program and its policies. They showed us reports and statements of IMF and other international financial institutions as prove of their economic success.
Every government after entering into an IMF program happily told us that IMF quarterly review has endorsed the government policies. The government feels happy and satisfied after getting positive quarterly review by IMF staff. It means more loans from IMF and other financial institutions.
This is a global trend, but one find it hard to get one example of a country which comes out of economic troubles and went on a long road of prosperity and high economic growth after the end of the programme. The so-called economic stablisation measures and policies always bring poverty, hardship, and miseries for the masses of that country. That is what Pakistani people are experiencing at the moment.
If one wants to learn from past experiences then history can teach one with many examples. But the irony is that no one wants to learn from the history and thus forced to repeat it. That is exactly what PM Imran Khan and his government is doing now.
If Prime Minister thinks that his government is the first in the history of Pakistan which has been showered with such praise by the IMF then the PM is wrong. He must ask the finance ministry to provide him the reports of quarterly reviews of IMF during the Nawaz Sharif government. He will find out the same praise and endorsements.
There is a familiar pattern the way IMF praise and criticise the governments. It praises the every government after entering a bailout program with it. It praises the current government for doing the right things and criticise the previous government for creating economic mess.
IMF never accept the fact that poverty- unemployment and prices of utilities and food goes up as the result of IMF policies. In every country- IMF dictated neo-liberal free market economic policies bring the same results. More taxes- abolish subsidies and increase prices of electricity- gas and other utilities. The masses suffer as the result of such harsh policies and conditionalities. IMF has a clear policy- never accept that IMF policies are disastrous for poor-middle class and working people.
In recent history, the last four successive governments have gone for IMF bailout packages. Barring the IMF programme approved during the Pakistan Peoples’ Party’s 2008-13 tenure, which was abandoned after few tranches, the IMF board and staff has been very positive about the implementation of each programme.
If one goes through the staff reviews given during the Shaukat Aziz era, one will find a number of similarities in the subsequent staff reviews given during the last Nawaz government. And now we are witnessing the same rather more intensive approval of Pakistan’s economy in the IMF staff reviews.
During the Shaukat Aziz era, the IMF reviews suggested that we have adopted a sustainable growth path and the economy was stable. However, barely six months after that government was booted out through election, Pakistan’s economy was in dire states.
This time around the then finance minister Ishaq Dar coined the term home grown formula, given to and accepted by IMF. This was the first IMF programme that was completed by any government.
All the quarterly staff reviews showered praise on the way the economy was moving in the right direction. In fact, it predicted a GDP growth of six percent in 2017-18, and higher in 2018-19 as a result of sound economic policies pursued by that government.
Pakistan did manage to record a GDP growth of 5.5 percent during the last year of the Pakistan Muslim League-Nawaz government. The IMF staff in its quarterly reviews never pointed out the dire need to devalue the rupee.
In fact its reports blamed the previous regime (that it had regularly been praising a year back) for keeping the rupee overvalued.
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28 March, 2020