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Delay in IMF deal: Need for new mandate

PakistanDelay in IMF deal: Need for new mandate
By: Asem Mustafa Awan

Prime Minister Shehbaz Sharif has pointed that Imran Khan is trying to thwart the recovery program from the IMF. A statement issued by Prime Minister’s office said the purpose of the chaos on the streets is actually to disrupt the IMF programme.

Another report quoted Finance Minister Ishaq Dar as saying that the staff-level agreement with the International Monetary Fund is getting further delayed. Another round of negotiations will be held Monday (today) while the two sides have taken time to discuss the points of disagreement.

Along with this explanation of the Finance Minister, it was also stated that the IMF is demanding Pakistan to give a schedule for repayment of loans by June 2023 and Pakistan will have to comply with the agreement.

Borrowing from the IMF has become a financial necessity for developing and underdeveloped countries. IMF wants assurances that its money is safe when providing loans.

The major cause of debt is the international trade and transaction system where payments are made in dollars. Developed countries take it only as a financial and economic necessity to keep their currency balanced against the dollar and ensure that their policies doesn’t affects political stability.

Dollar is not only a necessity, it  has also become a source of global influence on the policies of countries like Pakistan. This was the reason why General Pervez Musharraf, despite being an ally of the United States in the war against terrorism, freed the country from IMF debts during his tenure but the moment democracy was restored in 2008, dependence on IMF and other debts started to increase.

The dependency on IMF, World Bank, Asian Development Bank, Bank Islami and China, Pakistan should have had a reasonable number of ministers and economists reviewing the terms of the loan by now, but on the contrary this is not the case.

It is also a fact that political leaders for pandering the feelings of the public give impression that the IMF wants to enslave Pakistan and they will not accept this slavery while on the other hand, the IMF is told that the former government has given wrong data and created problems for current government dealing with IMF now.

Former Prime Minister Imran Khan has demonstrated this attitude as before coming to power, he kept saying that he would not take loan from IMF and the delay in getting the loans resulted in Imran Khan paying the price.

The PDM government created a narrative that PTI has destroyed the economy and put its political credibility at stake and when taking the power PDM’s claims of economic revival all crumbled down.

Finance Minister Ishaq Dar on his return from England went for a political gimmick and his approach towards IMF also backfired.

 This time the situation is completely different. The country’s largest political party is demanding fresh elections and two provincial assemblies are dissolved. With political instability there is no money back guarantee to the lenders and it is time that all stake holders should give priority to national interest rather than personal whims.

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