IMF-PTI government and suffering masses

High inflation is the result of IMF policies 

Prime Minister Imran Khan is not happy with all those media outlets- journalists-anchors and analysts who points out the high inflation and rising prices of food and utilities. For him-media is too critical towards his government and running aggressive stories.

He is not happy because IMF is endorsing the government policies and saying that the economy is going in the right direction. The IMF is praising the PTI government for implementing the IMF programs. Prime Minister Imran Khan believes what IMF is saying about the economy like the past Prime Ministers and rulers.

 Every government gets excited when IMF praised its policies and started to believe that Pakistani economy will achieve high growth and economic development as the result of IMF program and its policies. They showed us reports and statements of IMF and other international financial institutions as prove of their economic success.    

Every government after entering into an IMF program happily told us that IMF quarterly review has endorsed the government policies. The government feels happy and satisfied after getting positive quarterly review by IMF staff. It means more loans from IMF and other financial institutions.  

This is a global trend, but one find it hard to get one example of a country which comes out of economic troubles and went on a long road of prosperity and high economic growth after the end of the programme. The so-called economic stablisation measures and policies always bring poverty, hardship, and miseries for the masses of that country. That is what Pakistani people are experiencing at the moment.

If one wants to learn from past experiences then history can teach one with many examples. But the irony is that no one wants to learn from the history and thus forced to repeat it. That is exactly what PM Imran Khan and his government is doing now.   

If Prime Minister thinks that his government is the first in the history of Pakistan which has been showered with such praise by the IMF then the PM is wrong. He must ask the finance ministry to provide him the reports of quarterly reviews of IMF during the Nawaz Sharif government. He will find out the same praise and endorsements.

There is a familiar pattern the way IMF praise and criticise the governments. It praises the every government after entering a bailout program with it. It praises the current government for doing the right things and criticise the previous government for creating economic mess.

IMF never accept the fact that poverty- unemployment and prices of utilities and food goes up as the result of IMF policies. In every country- IMF dictated neo-liberal free market economic policies bring the same results. More taxes- abolish subsidies and increase prices of electricity- gas and other utilities. The masses suffer as the result of such harsh policies and conditionalities. IMF has a clear policy- never accept that IMF policies are disastrous for poor-middle class and working people. 

In recent history, the last four successive governments have gone for IMF bailout packages. Barring the IMF programme approved during the Pakistan Peoples’ Party’s 2008-13 tenure, which was abandoned after few tranches, the IMF board and staff has been very positive about the implementation of each programme.

If one go through the staff reviews given during the Shaukat Aziz era, one will find a number of similarities in the subsequent staff reviews given during the last Nawaz government. And now we are witnessing the same rather more intensive approval of Pakistan’s economy in the IMF staff reviews.

During the Shaukat Aziz era, the IMF reviews suggested that we have adopted a sustainable growth path and the economy was stable. However, barely six months after that government was booted out through election, Pakistan’s economy was in dire states.

This time around the then finance minister Ishaq Dar coined the term home grown formula, given to and accepted by IMF. This was the first IMF programme that was completed by any government.

All the quarterly staff reviews showered praise on the way the economy was moving in the right direction. In fact, it predicted a GDP growth of six percent in 2017-18, and higher in 2018-19 as a result of sound economic policies pursued by that government.

Pakistan did manage to record a GDP growth of 5.5 percent during the last year of the Pakistan Muslim League-Nawaz government. The IMF staff in its quarterly reviews never pointed out the dire need to devalue the rupee.

In fact its reports blamed the previous regime (that it had regularly been praising a year back) for keeping the rupee overvalued. The new adviser on Finance Dr Hafeez Sheikh again applied the formula of home grown remedy and agreed on an ambitious revenue increase programme setting unprecedented targets (now he is requesting the IMF to lower the revenue collection target).

It is worth mentioning here that 5-10 percent of the population has the capacity to absorb the IMF shocks and another 30 percent manages to survive by lowering their living standards and quality of life. An overwhelming majority in medium low income countries like ours have nothing to fall back on. To survive each shock they have to do away with some essential expenses.

Since their first priority is to feed their families, they allocate most of their funds for food. Whatever is left after food expenses is then spent on shelter, utilities, health, and education.

Shelter is their first priority and education the last. Around only 20 percent of the population manages to fulfill these essential needs; though they compromise on quality of food, shelter, utilities and health and education.

They have no choice over the utility bills that they have to bear on actual consumption. The miseries inflicted by the current programme are unbearable. The economy might improve after 5 years, but there would be few survivors to enjoy the fruits of progress.

                                                                              Khalid Bhatti