IMF goes native
The IMF appears to be quietly lowering the hurdles required for the next few tranches of its bailout package.
We recognise that Pakistan needs a faster disbursal of the bailout money, and we welcome the result, but are very deeply disturbed by the process. ILLUSTRATION: JAMAL KHURSHID
Having spent years arguing back and forth with the denizens of Q Block, it appears that the International Monetary Fund (IMF) has gone native, resorting to the same sort of pressure tactics and manipulation of numbers that were once the hallmark of the finance ministry’s budgetary strategy. We understand why the finance ministry wants to hide the truth and not confront the numbers. We find ourselves astounded as to why the Washington-based lender has decided to go along with the charade. Having first pressured the State Bank of Pakistan to lower its projections of the current account deficit, we now learn that the IMF has been forced to confront reality and is now revising its own estimations. As a result, the IMF appears to be quietly lowering the hurdles required for the next few tranches of its bailout package.
We recognise that Pakistan needs a faster disbursal of the bailout money, and we welcome the result, but are very deeply disturbed by the process. By resorting to such tactics, the IMF has effectively surrendered on the notion of trying to pressure the finance ministry to raise more tax revenue. Yes, we still occasionally get the statements from the international lender supporting the idea, but its actions speak otherwise. It is, of course, not the job of the IMF to motivate the finance ministry to act in a rational manner. But if borrowed money is the narcotic, and the finance ministry is the addict, then in this particular case, the IMF is playing the role of the drug dealer. It is time to separate the dealer from the addict.
The most disappointing aspect of this whole situation is the fact that, six months after coming into office, the Nawaz Administration has still not articulated a clear revenue generation policy that would free the country of such arithmetic shenanigans. Saying that they want to tax the wealthy is not enough. They have to lay out and execute the strategy for making that happen. And while the Prime Minister’s House remains silent, the civil servants in Q Block will continue business as usual, all the while, the country’s financial health withers away.
Published in The Express Tribune, November 18th, 2013.
We recognise that Pakistan needs a faster disbursal of the bailout money, and we welcome the result, but are very deeply disturbed by the process. By resorting to such tactics, the IMF has effectively surrendered on the notion of trying to pressure the finance ministry to raise more tax revenue. Yes, we still occasionally get the statements from the international lender supporting the idea, but its actions speak otherwise. It is, of course, not the job of the IMF to motivate the finance ministry to act in a rational manner. But if borrowed money is the narcotic, and the finance ministry is the addict, then in this particular case, the IMF is playing the role of the drug dealer. It is time to separate the dealer from the addict.
The most disappointing aspect of this whole situation is the fact that, six months after coming into office, the Nawaz Administration has still not articulated a clear revenue generation policy that would free the country of such arithmetic shenanigans. Saying that they want to tax the wealthy is not enough. They have to lay out and execute the strategy for making that happen. And while the Prime Minister’s House remains silent, the civil servants in Q Block will continue business as usual, all the while, the country’s financial health withers away.
Published in The Express Tribune, November 18th, 2013.