The IMF Disease Eating Away Our Daily Bread

946 Words Jul 13th, 2018 4 Pages
The IMF disease eating away our daily bread

Pakistan’s economy has paid a huge price in partnering the war on terror with the USA. According to a recently released IMF report called “Pakistan Poverty Reduction Strategy Paper”, total losses, measured in terms of exports, foreign investment, industrial output and tax collection, are estimated to be around RS 2.08 trillion during the last five years period.

The war on terror has outbalanced already stretched financial resources of the government as a consequence the development projects have been cut resulting in increase in poverty and unemployment. The nation incurred a loss of RS 259 billion in FY 2005 and in FY 2009 it reached over RS 650 billion-indicating more than 100%
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Coming back to the IMF report findings, it says, to regain macroeconomic stability, Pakistan needs to expand its economy 5-7% per annum over the next 5 years period, create adequate number of jobs, improve income distribution and liberalize the economy, and set gear for transparent privatization. The IMF needs to understand that the epicenter of Pakistan’s problem is the political economy of the country than the economy itself. The two core issues that needed to be addressed immediately are; improvement in security situation and the economic governance.
The government is running out of choices as on the one hand it has to meet the harsh conditionalities of the IMF and on the other has to save the economy from total collapse-balancing the two wheels is rather a difficult job for the economic managers of the country. The harsh IMF conditions at the moment are doing no good to the economy, instead, have added to the frustration of common men. What Pakistan needs right now is a growth which is not only demand driven but job oriented which will help increase consumers’ income and standards of living of average Pakistanis. But with high prevailing interest rates, poor security situation coupled with carrot and stick game of the IMF, the task is unlikely to be achieved. Hence the growth will remain subdued in the near
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