By: Asem Mustafa Awan
According to Prime Minister Shehbaz Sharif, the International Monetary Fund (IMF) has decided to send a delegation to settle the pending issues and to review the financial relations with Pakistan in the future.
During a telephonic conversation on behalf of Prime Minister Shehbaz Sharif, IMF Managing Director Kristalina Georgieva excused herself from participating in the donor conference in Davos, but she expressed her concern for Pakistan on the economic difficulties caused by the floods.
MD International Monetary Fund’s expression of sympathy is seen in conjunction with the size of the national foreign exchange reserves at 4.5 billion dollars. The prospect of immediate relief from the IMF appears slim, but the growing interest of the US and the West in a new anti-terrorist plan suggests that the expected IMF delegation is likely to finalize the deal with Pakistan after the flood.
The main reason for the rapid decline in foreign exchange reserves is the repayment episodes of huge foreign loans another reason is the decrease in exports and the increase in imports, lastly the grim reality of uncertainty on the financial and economic policy of the government.
The government is still determined to justify its economic and financial policy through political and demonstrative measures while Tehreek-e-Insaf had announced before coming to power that if they form the government, they will not approach International Monetary Fund. As PTI came to power, it was realized that the previous governments had taken huge loans from the IMF and other financial institutions and spent them on non-productive projects. Metro Bus, Orange Train and other such projects were started with the loan amount and the biggest flaw in planning has been that every day the state is borrowing from its exchequer to continue projects built on debt.
Talks with the International Monetary Fund were important for the PTI government, with its own agenda in mind and that was the reason Finance Minister Asad Umar was removed.
Hafeez Sheikh took over signed a bailout package of 6 billion dollars with the IMF and after Hafeez Sheikh, Hamad Azhar and Shaukat Tarin continued to run the country’s economy keeping in view the conditions of the same bailout package.
The schedule of the IMF delegation’s arrival in Pakistan is still shrouded in doubt, the finance minister and his associates are pointing at what could be taken into consideration during talks with the IMF. Ahead of talks with the IMF, Finance Minister Ishaq Dar is saying that his government is considering a flood tax on foreign currency earnings of banks.
Similarly, the disbursement of the loan from the IMF has been stalled due to disagreements over the plan to deal with the revolving debt and the strategy to stabilize gas prices.
The installment of 1.18 billion dollars from the IMF in September last year, Pakistan promised to improve its poor performance in financial sector and situation till date is not satisfactory.
Common Pakistanis are of the opinion that IMF is used as a tool for colonialism to keep countries like Pakistan oppressed and subjugated. Redefining national priorities and taking all stakeholders on board is need of the hour.
