The costly IMF dollars

The eagerly-anticipated IMF dollars are all set to come. An agreement for an economic bailout package has been agreed upon in principle between the Fund and the Government of Pakistan, and an official announcement is just what’s awaited. If described in Asad Umar’s words, the gap in the positions held by the Fund and the government’s economic team has been bridged after ‘constructive’ discussions, and 6 to 8 billion ‘hard-negotiated’ dollars would soon ‘bolster’ the exchequer. For the sake of the much-needed IMF dollars, the government has had to ‘discipline’ the economy marred by the ‘problematic’ policies of previous rulers — by ‘rationalising’ electricity and gas tariffs; ‘adjusting’ the domestic oil prices in line with the international market; easing ‘artificial’ control on the value of the rupee against the greenback; giving the ‘necessary’ nod to take steps for avoiding the losses incurred by sick industrial units, understandably by adopting the policy of privatisation; and bridging the hole in the annual expenditure and revenue by ‘swallowing’ the ‘bitter pill’ of agreeing to raise taxes; among other measures.

Strangely though, the finance minister insists that the IMF bailout programme will not burden the common man — as if it is not the common man who consumes electricity and gas; none of the vehicles that run on petrol belongs to the common man, and the rise in transportation costs due to costlier petrol will not affect articles of daily use; the impact of a more expensive dollar will only magically target the classes, exempting the masses automatically; and some ‘uncommon’ men will be chosen to impose the taxes aimed at bridging the ‘unprecedented’ budgetary deficit that the incumbents inherited from their ‘corrupt’ and ‘incompetent’ predecessors.

However, after all the ‘difficult’ and ‘unpopular’ decisions, the ailing economy is only out of the intensive care unit, and needs more time for stabilisation — a process which, according to the finance minister, would continue for some time and could not be expedited otherwise the country would again descend into the balance of payment crisis. The warning is pretty clear: hard days are hard to go.

Published in The Express Tribune, April 17^th, 2019.

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