IMF loans never lead to progress: economist
Subject to the final modalities, the IMF has agreed that the programme will be extended by another nine months to one year. PHOTO: FILE
Noted economist Dr Ashfaque Hasan Khan has attributed the increasing unemployment, poverty and inflation in the country to the International Monetary Fund (IMF) programmes, claiming that not a single country that adopted the IMF programme could ever progress.
“I have always said the economic condition of any country which has gone to the IMF has never got better,” Dr Ashfaque said while talking to the hosts of Express News talk show the Review on Friday.
“Unemployment, poverty and inflation have increased in all the countries that opted for the IMF programme,” he said. “The IMF programme will never allow you to move ahead.”
The economist was talking with reference to reports about the government considering renegotiating the IMF programme. He said the conditions set by the lender will create more difficulties for the people as the government will have to impose new taxes and increase electricity prices in the coming months.
During the discussion, it transpired that Pakistan will have to implement a dozen conditions in six months to remain in the $6 billion IMF programme. These conditions will, however, put an additional burden of Rs1500 billion on people.
About imposition of additional taxes in the upcoming budget under the IMF’s pressure, Dr Ashfaque said the government is overburdening people despite rising unemployment and decreasing purchasing power in the face of skyrocketing inflation.
Dr Ashfaque regretted that the government is celebrating 2% growth rate when the country should have been progressing at the rate of 7% to 8%.
Quoting the World Bank, one of the hosts noted that half of Pakistan’s workforce is severely hit by the Covid-19 crisis. “It is estimated that 20.7 million workers (37% of the total) lost their jobs and an additional 6.7 million workers (12%) saw a decline in their labour income between April and July 2020.”
To the question if it was not a failure of the IMF programme and PTI government that the country is living on bailout packages despite bringing the economy to a standstill, he said the government had to go to the IMF as it remained unsuccessful to get economic support from friendly-countries back then.
According to Dr Ashfaque, asking China for support despite entering the IMF programme was inappropriate as China has been supporting Pakistan so that it could stand on its feet but the government is failing on that front.
One of the hosts noted that the IMF programme theoretically aims at putting Pakistan on a path to sustainable growth yet the government is relying on friends like China from which it gets $11 billion annual financial support.
To a question about the China-Pakistan Economic Corridor (CPEC) projects, he said there is a small litmus test that can show how serious the federal government is in implementing the multi-billion dollar roads-and-rail project.
“One should see how many times Prime Minister Imran Khan visited Gwadar last year; where the CPEC Authority is these days and what is it up to. One should also ask where did [CPEC Authority Chairman] Gen (retd) Asim Saleem Bajwa go.”
Dr Ashfaque said not a single special economic zone (SEZ) being constructed under the CPEC programme has so far been completed or made functional. He emphasized that the premier should form an effective economic team that can tackle and overcome the economic issues.