Pakistan: IMF Programme needs to be debated

Raza Rumi’s oped published in the NEWS (Pakistan)

The not-so-inevitable is about to happen. After weeks of groping in the darkness of global financial mess, the Pakistani government is negotiating with the International Monetary Fund. Admittedly, Pakistan’s options are limited, given its intractable dependence on oil imports for survival. The civilian government moving from one crisis to another has elevated indecision to a policy status. This does not imply that we start echoing the unwise cacophony of impatience with an elected and far more legitimate government than the eight-year-long authoritarian regime. But then who cares: if recent history is a guide, PPP governments come with a brand or at least get branded as incompetent comprising coteries of cronies, as if the rest of the country is a fair, rule-based haven.

The plain truth is that the power-wielders of Pakistan have been following a set of disastrous policies for decades that have now put the survival of the state, or as we knew it, in question. From the great hunts for strategic depth and Jihad, and from nurturing domestic oligarchies and pampering a delinquent industrial sector at the expense of land tillers and equitable irrigation, we are now paying the price for policy making by the elites for the sustenance of the elites.

‘IMF popularity at all-time low’

From the Daily Times, Pakistan

* Pakistan Economy Watch president says IMF policies ruined 68 economies worldwide

ISLAMABAD: The Pakistan Economy Watch has said that the popularity of International Monetary Fund (IMF) has dwindled significantly and it should modify its policies to increase the level of acceptance.

The popularity of fund established in 1945 is at an all-time low. Lack of customers has put its own existence in jeopardy. It’s high time for international lenders and IMF to reconsider their policies often blamed for enhancing poverty and gap between rich and poor, said Dr Murtaza Mughal, President of the Pakistan Economy Watch.

World Bank’s advice to Pakistan

World Bank’s advice
 
While the new government is learning to walk, the World Bank (WB) has warned it to watch its steps on its way to economic stability. The WB has advised the new government of Pakistan to carry out economic reforms and make quick adjustments to steer clear of an economic crisis. The reminder to keep in view the economic aspect while making policies came from Praful Patel, WB vice president, at the end of his three-day visit to Pakistan. Patel’s word of caution reflects his concern that Pakistan is likely to miss targets of fiscal deficit, current account deficit, inflation, and foreign exchange reserves. Patel has observed that there is no crisis at the moment but he believes that the economic indicators of Pakistan are not a good omen for the future economic picture of the country. According to Patel, the economic growth Pakistan had seen over the past few years, in addition to foreign direct investment and remittances, could be maintained only if the government had adjusted to the global prices of oil and wheat. Patel’s saying that since re-adjustments in the economy would be painful “there must be an appropriate safety net for the poor” should be heeded to. This is not the first that IFIs have painted a bleak picture of Pakistan’s economy in terms of achieving its economic goals. According to the WB’s and Asian Development Bank’s (ADB’s) projections, Pakistan’s economy will not be able to meet its target of 7.2 percent GDP growth rate in the year 2008.

‘Making sense of Pakistan and its economy’

Dr. Kaiser Bengali’s address delivered in Karachi under the “The Green Economics & Globalisation Initiative”.

Let me begin by thanking Shirkat Gah for arranging this opportunity and you all for being here to exchange views. I am happy to see so many young faces here. This represents a change. I sensed the first indication of change in October 2005 when the earthquake hit. Young educated people, many of whom had never washed a spoon in their own houses, lived in tents and helped the victims. I think that something happened to bring a generation alive and we are seeing it again. In the current movement today, we may agree with a lot of things, not agree with a lot of things, but the point is that you are concerned, and that has been missing for 20 years, and 20 years is a long time. It’s a whole generation of people; people especially those in their 30s today, who in their own student days and youth were completely unassociated with any social issues. So I find this a very refreshing change and I consider myself fortunate that I am being able to interact with you today.

Now to the subject of economics. I know most of you do not have any economics background, but I will try to be simple. My ability to speak economics in rather simple language developed because when I started my career I started working with trade unions and I had to explain economics to people who were at best matriculates or even less, and that’s where I developed this ability to talk economics in the lay person’s language. I guess there was some kind of a social consciousness. I had no need to work with trade unions; I could have done consulting for the World Bank, or joined the World Bank. In fact I had an offer from an international bank. But like you, I thought I have to work with people and it is working with people that gave me the ability to speak the language of the people.

You have heard for the last 5 years at least, stories of economic miracles. Why is it that this miracle has begun to evaporate overnight? What kind of miracle can it be that is not sustainable? When General Musharraf made his speech on 2nd or 3rd November 2007, one of the things he cited as a reason for taking this extreme action was that the economy was going down. This was the first time anyone from the government side had admitted that the economy was going down. Otherwise when we were saying that the economy is not doing well we got very angry responses. So now we see that there are so many problems with the economy; there is a wheat crisis and flour is simply not available. It was in the newspaper a few days ago that oil stocks are down to less than a week. Why? What happened? Why are oil stocks down? There are other crises. Power of course is not there, we are all living with power shortages and power breakdowns, exports are stagnant and some categories of textile exports have actually declined. Our inflation is out of control and even the rich are feeling its pinch. So why has this happened all of a sudden? Where has the miracle gone? Where was the miracle?