KARACHI: “Pakistan’s recent agreement with the International Monetary Fund (IMF) would be our 22nd agreement with the IMF and it is no doubt the worst ever,” said well-known political economist Dr Akbar S. Zaidi.

He was speaking at a seminar on the ‘Present Economic Crisis and the Budget 2019-20’ organised by the Institute of Historical and Social Research (IHSR) at the Dr Zaki Hasan Auditorium of the Jinnah Medical and Dental College here on Friday.

“But the new governor of the State Bank, Dr Reza Baqir, says that the economic crisis that we talk of is over. Don’t forget that the man was, just a few days ago, and IMF employee,” he added.

“But going into agreements with the IMF is itself wrong in the first place. Though the current one is still pending approval there were some preconditions to it such as increasing the tax net. Now it is true that many here do not pay their taxes and it is the need of the hour but are we talking of things such as wealth tax and property tax or taxing the poor and salaried classes? Another condition to getting the loan is a substantial increase in utility bills with the third one being dropping the value of the rupee further against the dollar,” he informed.

Dr Zaidi said that the IMF claimed to be a non-political entity, but still they asked Pakistan to ask the countries from whom we had taken loans such as Saudi Arabia, the United Arab Emirates (UAE), China, etc, to give one year’s extension in returning the money. “It is so Pakistan doesn’t pay back their loans with the IMF money,” he explained.

Speaking of IMF conditions and programmes, he also reminded that of the 13 previous programmes Pakistan could only fulfil two, one by the Pervez Musharraf government when Shaukat Aziz was the finance minister and the other by the Nawaz Sharif government when Ishaq Dar was the finance minister. “But here Imran Khan and Asad Umar didn’t even know how to run a government,” he said.

“All the parties while campaigning during the last elections were saying that there may be a need to approach the IMF, but the PTI was saying that they would rather commit suicide than take that route. Now the people would be committing suicide thanks to their actions. In the last 10 months of this government our GDP rate has fallen from 5.8 per cent to 3pc. And seeing what the economic analysts are writing it will drop further to 2.4pc by next year,” Dr Zaidi pointed out.

5m houses, 10m jobs?

Dr Riaz Sheikh, dean of social sciences at Shaheed Zulfikar Ali Bhutto Institute of Science and Technology (SZABIST), spoke about the concept of a welfare state and social protection in Pakistan. “Social protection here was initiated in the decade of 1970s. Article 38 was inserted in the 1973 Constitution followed by the Employees Old-Age Benefits Institution, Social Services, Baitul Maal, etc. The National Social Protection Strategy-2007 also came but there was no major work done there. Then in 2009, there came the Benazir Income Support Programme (BISP) and now this budget has added an increase of Rs133 per month there. Is it enough in the face of rising inflation?

“What is happening with the promise of five million houses for the poor? What of the promised 10 million jobs? Instead half the country is now jobless and there is talk now of a new ministry to look into joblessness. There is also talk about signing an MoU with China to learn from them how to combat poverty. I only see a lot of romanticism and no realism,” he said.

‘Only popular slogans’

Dr Syed Jaffar Ahmed said that the PTI won the elections by raising popular slogans without any understanding or research on the country’s economic needs.

“We already owe countries such as Saudi Arabia, UAE and China. Then if we agree to the IMF conditions, as we are told that we have no other choice, there are going to be more taxes to be paid on utilities as the Federal Board of Revenue also expands its tax net. It is very difficult to meet these targets,” he said. “Instead there will be corruption in tax collection,” he added.

Dr Ahmed also pointed out that if they say that there had been no increase in our military budget, one should also understand that the military budget did not include pensions of military personnel and neither was the nuclear missile programme a part of the military budget. “Meanwhile there have been reductions in the education budget at the federal level,” he pointed out.

‘Increase in sales tax to hurt industry’

Karamat Ali, the executive director of the Pakistan Institute of Labour Education and Research (Piler), said that so many industries such as the sports goods industry, surgical instruments industry, oil manufacturers, etc, had been saying that the increase in sales tax might force them to shut down as it would hurt exports. “Hurting industry and the manufacturing trade in turn hurts the labour force as inflation goes up also,” he said. “And then it affects the health and education of the families of workers as they get less food, medicine or medical attention and education as they would be unable to afford all these basic necessities,” he added.

“This time the government has sold the country to the IMF as their people will come and sit in your nerve centres. This time people who are not even born as yet have been indebted as they too would be paying back the IMF when they come into the world and grow up,” he said. “They are to brace themselves for no food, no medicine, no education, joblessness, homelessness, which are all coming this way.”

Published in Dawn, June 22nd, 2019