PAKISTAN these days is trying to get into yet another arrangement with the International Monetary Fund (IMF), and apparently the chances of success in its bid are rather high. One wonders, however, if an IMF package and the word ‘success’ should be logically used together in a sentence. After all, recourse to IMF indicates failure, not success, right?

Pakistan first went to the lending agency seeking help back in 1958. After all the bailout packages, Pakistan is still going through a crisis which has been repeatedly described as ‘unprece-dented’. So, what is this ‘success’ story all about?

Almost every government in Pakistan has approached IMF for financial help. Pakistan faces a trade deficit of billions of dollars every year. To meet the deficit, Pakistan needs IMF help. However, these loans come with strings attached, as do all loans and even ‘friendly’ aid. The government has to meet strict terms and conditions, including raising taxes, hiking prices, imposing restrictions, and so on. In other words, an IMF deal comes at the cost of national sovereignty and independence.

IMF loans actually never ‘help’ us even though they do save us from default. Such international lending patterns are nothing but a vicious cycle for developing countries. It is because of these patterns that scholars and economists, like, for instance, Joseph Stiglitz, have criticised IMF and World Bank for their manipu-lative policies.

IMF never encourages governments to go for foreign investment in the country. IMF never asks governments to educate their people who may then lead the nation in the future. IMF never asks governments to strengthen their accountability processes. IMF, understan- dably, lends loans with interest rates, and after a designated period, the loans with due interest have to be paid back. A state like Pakistan that has precious few things, if anything, to attract dollars with, the trade deficit cannot come out of this vicious circle. Even a layman understands how IMF and its shareholders blatantly exploit Pakistan. Having said that, can we find fault with the lending agencies? After all, we are the ones who approach them. We initiate the process, and we agree to whatever terms and conditions the lending agencies impose. The fault lies with us.

Pakistan has to understand that IMF policies are nothing but a debt trap that will keep us dependent on loans. IMF is what it is. It has been established to exploit weaker nations. Luckily, the problem with Pakistan does not lie with the trade deficit alone. It is its own policies that need to be changed.

To get out of this economic whirlwind, the simplest way for Pakistan is to bring in digitalisation in every sector and lessen the element of human interference to the extentthat it possible. Less human interference will translate into less greed and, therefore, less corruption.

Tariq Zafar
Wahi Pandhi

Published in Dawn, April 14th, 2024

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