Experts warn Pakistan in trouble with or without IMF bailout

As the upcoming government of Pakistan Tehrik-e-Insaf (PTI) dwell over whether to approach International Monetary Fund (IMF) or not, experts say that the loan will just not be enough to offset the deteriorating economic conditions.

Economic experts have called for 'bold reforms agenda' from the upcoming government to get Pakistan out of the loan cycle. "Without the implementation of a bold reforms agenda, neither option will be able to wean Pakistan off its addiction to foreign loans to keep its economy afloat," warned Uzair Younus, director of the South Asia practice at strategy firm Albright Stonebridge Group, quoted CNBC.

Meanwhile, others have objected over Pakistan approaching the US based lender. Nadeem ul Haque, former deputy chairman of Pakistan's Planning Commission and a former IMF senior resident representative, described Pakistan as 'an IMF addict' in an article on Project Syndicate op-ed. He indicated how IMF loans undercut 'productivity and growth potential by eroding governance and state capacity, and creating conditions for ever more rent-seeking and corruption'.

"Alongside distortionary tax policies, the IMF has forced the finance ministry into unplanned spending cuts without any real reforms," he added, which leads to halt public services and infrastructure projects. "New IMF funding will no doubt lead Khan's government to repeat past mistakes," Haque opined.

Meanwhile, Asad Umar, the expected soon-to-be finance minister, has earlier stated that his party’s government will decide on whether to seek a bailout from the IMF or friendly nations such as China by the end of September.

The former Engro chief has promised to reduce indirect taxes, including withholding tax that he saw over 90 percent, as they affect the most to the poor.

"We are going to bring reforms in the Federal Board of Revenue and will bring a new chairman to increase revenue by plugging tax evasion and corruption. We will separate the tax policy from the tax administration and plug ongoing massive tax evasion and corruption," Umar said.

Economy remains one of the daunting tasks for Imran Khan’s government, which is all set to take charge of the country in coming weeks.