There’s always an angle
The Fund is never without its politics. Nor is any other bilateral or multilateral lender for that matter – the World Banks and ADBs of this world. Remember the Musharraf days, when siding with the US after 9/11 became the smart thing to do, at least from the economy’s point of view? The Paris Club debt was rescheduled the Fund and the Bank began praising economic diversification and infrastructural enhancement, etc. There was more fiscal space and some high growth years followed. But the politics of it made sense back then. Musharraf gave the right answer to the “with us or against us” threat, and considering everything it implied, was being paid back in kind.
But what’s the angle now? One would take the Fund’s latest report at face value, but for the obvious glossing over facts and unwarranted praise for fiscal consolidation, along with a number of reforms that seem missing in real life. The structural reforms, for example, where the fund employs more verbiage than fact, statistics, trends, etc, to support its claims. The need for setting fiscal deficit targets is understandable, but how an important report like the IMF’s can accept implied intent to ensure complicity is not. Where is the breakdown of the structural reforms that the Fund so agreed with? Then there are tax reforms. Do IMF economists believe, just like N league leaders, that mailing tax forms to people who should have been paying since long amounts to reforms, not duty?
In the world of science, and political science also, one can be random, but two is a trend. How then must one take IMF’s take on Pakistan’s economy, especially since there is little to write home about from the common man’s point of view? Take the electricity situation, which impacts the public directly, at home and at work, and is once again set to drive people crazy over the summer. Yet there was no notable mention of the circular debt in the report, which is at the heart of the problem, not production capability, infrastructure, or investment into expansion.
Also, just the fact that the finance ministry is going the extra mile to accommodate IMF targets in the budget, and ensure continuing praise, is ironic considering the N league campaigned on the promise of ridding the economy of the Fund, breaking the begging bowl, etc. The government’s first and foremost concern must be the public, however clichéd that sounds. And it should pay particular attention to the working middle class. They are the main productive component of any economy, and how years of low growth, high inflation, increasing terrorism and crowding out of investment have squeezed them bodes ill for the economy, and the government.
