This is apropos a Business Recorder op-ed ‘doesn’t matter who is/becomes FM’ carried by the newspaper yesterday. The writer, Shahab Jafry, deserves a lot of praise for presenting an informed perspective on how the country has been beset by economic woes for the past many years, if not decades. But he appears more impressive in his portrayal of IMF-Pakistan relationship and successive finance ministers’ helplessness or their inability to act effectively.
According to him, for example, “All this only goes to show that at this point it does not really matter who the finance minister is or what qualification(s) he boasts, because the most crucial elements of fiscal policy are hostage to the bailout programme.
Every time any finance minister has tried to divert from the fine print during the EFF, he’s had to ultimately cave into yet stricter conditions.”
It is quite true that a country’s pledge to undertake certain policy action are an integral part of IMF’s lending. But the Fund has been found to be least bothered about the fiscal woes of a country that has received its lending.
The Fund employs every tool available at its disposal to ensure that the recipient must repay it. It has often been seen that the lender of last resort takes certain actions of pressurizing the recipient into doing something it is unwilling to do. The recent 100 basis points increase in key policy rate by State Bank of Pakistan is a strong case in point. Therefore, the IMF, in my view, is no cure; it’s a curse.
Noman Qureshi (Lahore)
Copyright Business Recorder, 2022
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