Original Articles

Should Pakistan approach the IMF?

 

I am looking for more substantive critiques of the IMF. Their current prescriptions to the current clueless and selected PTI government are beyond reprehensible.

Both PML N and PTI governments have:

1. Increased production input prices (electricity, gas)

2. Poorly managed the money markets leading to a near 50 % depreciation of the ruppee since 2013.

3. Increased imports (mostly PML N)

4. Wasted massive public funds on wasteful, inefficient and full of kick backs Metro projects

5. Poorly negotiated CPEG by PML N that failed to utilise Pakistan’s logistical leverage and instead changed a proposed investment trade deal into another loans with kickbacks.

6. Failed to utilise record lows in 21st century oil prices

7. Develop incoherent and wasteful economic policies to benefit powerful corporate dynasties like the Manshas, Siddiqui’s (PML N) and Dauds, Tareens (PTI)

8. Selective accountability in the form of witch hunts against political rivals – mainly the PPP

9. Catering excessively to banned sectarian organisations like the ASWJ-LeJ aka Sipah Sahaba

10. Rehashed the same trickle down theories that have been discredited for decades

These steps by the 2 successive right wing governments of PML N and now PTI have scuttled Pakistan’s economy. Lahore is not Paris and Mianwali is not Silicon Valley either.

As a result, Pakistan is depending on imports while destroying its own agricultural sector.

Pakistan went from exporting wheat and cotton in 2013 back to importing them.

India, Bangladesh and China have all appreciated their currencies while increasing their exports in the same period. Pakistan has seen the opposite.

Energy prices were increased 400% by the PML N government which crashed Pakistan’s manufacturing and thus exports. There was no reason to do this but benefit private power producers like Mansha. The 2008-2013 PPP government had controlled input and support prices and more than doubled Pakistan’s exports during its tenure. That was is spite of facing oil prices in the $148-90 range.

PML N faced an average oil price of less than $50 and yet increased power prices by several multiples. Oil is the main input for energy production in Pakistan.

Global lending institutions have historically supported military dictatorships in Pakistan. The Musharaf era is a case in point. The same cannot be said of elected governments – even if much of Imran Khan’s “mandate” was manufactured.

Ironically, the only way the PTI government can come out of this mess is by following the PPP and reducing imports and thus the trade deficits.