Going to the IMF


No walk in the park


While Finance Minister Asad Umar confirmed that he would go later in the week to Washington to attend IMF and World Bank meetings, and would formally press the IMF to give Pakistan a much-desired bailout package, the package has already run into trouble. Even before Mr Umar left for Washington, the Indian lobby pressed for no package to be given. The reason? The money would be used to pay off loans given by China for CPEC projects. Though this allegation has long been exploded, it was raised again by three US Congressmen in letters to the Secretaries of the Treasury and State asking that the USA vote against the deal. One of the Congressmen is co-chair of the Indian caucus in the House, another is vice-chair. That opposition will not be honoured because it is right, but because the Congressman are strong enough to carry their point.

As if this Indian opposition was not enough, Senator Sherry Rehman had already Monday called on the government to lay before the House the details of the deal it makes with the IMF in a speech to the House last Monday. As she is the Leader of the Opposition in the Senate, her demand carries more weight than if it had been made by a backbencher. The reason for this is that this government had not only pledged to avoid the IMF, but that the package was expected to carry harsh conditionalities that would lead to the people of the country facing greater hardships than they have already suffered. She predicted that the package would unleash inflation hitting the common man hard.

It must be noted that the government has obtained bailout packages from friendly countries, carried out harsh devaluations and issued bonds, but these measures have failed to even tame the economic difficulties that have made Pakistan turn to the IMF, such as the current account deficit, the fiscal deficit, and stagnant government revenue. However, the IMF package has been felt to be essential to keep the ship of state afloat. With roadblocks being set both internationally and domestically it will be no walk in the park to secure the deal.