Pakistan has no other option but to agree to the terms of IMF

Islamabad: Pakistan’s Prime Minister Shehbaz Sharif admits that his country has no choice but to accept the terms set by the International Monetary Fund (IMF). The conditions of the IMF will force the government of Pakistan to raise taxes for higher revenues, increase electricity and fuel prices and cut employee wages. Additionally, all the subsidies and concessions given by the government will have to be rolled back. Prime Minister Shehbaz Sharif is presenting the grim situation to the people of Pakistan.

Pakistan’s current foreign reserve is about six billion dollars, of which Saudi Arabia has provided 3 billion on a condition of no use. Hence it is claimed that Pakistan’s actual usable foreign reserve is significantly lower than six billion dollars. Under these circumstances, securing a loan of 1.1 billion dollars from the IMF has become extremely important for Pakistan, providing respite to its economy for at least a few weeks. But Pakistan is finding it difficult to get this loan from the IMF.

On previous occasions, Pakistan defaulted on its commitment to the IMF. Pakistan never implemented financial discipline to increase revenue through taxes, nor did it correct electricity and fuel prices. Hence the IMF has indicated that it does not trust Pakistan, as it lacks financial planning and discipline. On the contrary, Pakistan arrogantly responded by refusing to accept the demands set by the IMF. However, this attempt has boomeranged and turned against Pakistan. Therefore, in desperation, Pakistan must bear the embarrassment of accepting the terms set by the monetary fund. The Prime Minister of Pakistan has decided to share this ongoing situation with the people of Pakistan.

Pakistan’s economy is under stress, and people are already affected by high inflation. The price for 1 kg of flour is about Rs.150; there is no new job creation. The government is finding it difficult to pay employees and diplomats in embassies abroad. Due to this, the property of the Pakistan Embassy in the US has been put up for sale.

The present and past governments in Pakistan showed very little financial discipline to get the economy on track, resulting in such a dismal state of the country. Taking tough decisions on economic policies is political suicide in Pakistan. Hence the intellectuals and journalists in Pakistan are criticizing the leaders of Pakistan for not implementing tough policies.

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