The Pakistan team, headed by Federal Finance Minister Hafeez Sheikh, is going to Washington to attend meetings of the World Bank and IMF, where it will not seek an extension of the IMF programme which expired on September 30, making it the eighth of nine IMF programmes to end without completion.
The current programme ran aground because of three policy targets which the government failed to implement: limiting the fiscal deficit to 4.7 percent of the GDP, introducing a Value Added Tax (VAT) and power sector reforms. Pakistan had obtained an IMF programme of $11.3 billion in 2008, but with $3.7 billion still to be disbursed, there were slippages in the performance criteria and the programme was suspended in May 2010.
It goes to the credit of Shaukat Aziz that he presided over the completion of an IMF programme and did not renew it. It must be remembered, however, that he did so at a time when Pakistan was much needed in the USA’s war on terror.
That was another piece of evidence that the IMF is merely a subsidiary of the USA when it comes to its decision-making, and this decision-making process is much more politically motivated than economically. However, the IMF does not forgive sloppy economic performance, something of which the current government is guilty.
OSAMA AHMED
Karachi
