Pakistan had no option but to go to IMF, say experts

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In two separate discussions on striking a deal with the International Monetary Fund (IMF) and its impact on Pakistan’s economy, speakers said that there was no choice for Pakistan but to turn to the international economic body.The main objectives of two discussions organised by The Second Floor (T2F) and the National Trade Union Federation were to ask the answers of the questions to discuss the possibility of an alternative to an IMF programme for Pakistan and its fallout on the poor as this programme was implemented.Also, leading experts discussed some of the non-economic factors at play as the government sets out to undertake a painful economic adjustment.T2F talkThe Second Floor organised a panel discussion titled “Ye Watan Humaara Hai 3: IMF and the Economic Future of Pakistan”, inviting former finance minister Asad Umar and leading economic experts Kaiser Bengali and Dr S Akbar Zaidi, to discuss the agreement with the IMF. Journalist Khuram Hussain moderated the session.Umar in the discussion acknowledged that striking a deal with the IMF was inescapable. But he also claimed that that the current IMF deal was far less severe than what was being offered back in October.He said that when the Pakistan Tehreek-e-Insaf (PTI) government came to power, the country was facing a balance of payments crisis.“Maybe because we have always gone to the IMF and because the balance of payment crisis we were facing this time was unprecedented,” he said. However, defending his government’s stance in the earlier months, Umar said that the government did exactly what we had claimed before the general elections to explore all options.On delay in approaching the IMF, he said that the government was trying to create options at a time when the United States was making statements that IMF loans would not be given to Pakistan to pay off Chinese loans.In such a situation, the government was very careful to explore other options, and after it, Prime Minister Imran travelled to Saudi Arabia, the UAE and China in hopes of securing additional funding – which he was successful in achieving, he said.Beginning his talk from commenting on Umar as a fortunate person for being removed as finance minister, Zaidi said that of the 22 agreements that Pakistan had had with the IMF this was the most stringent. “This is largely because in the first 10 months, the government did not understand the situation; which is why they couldn’t handle the situation or find the solution.”He said that although the economy was in a precarious situation when the PTI government took charge, the current government failed to improve the situation and in fact worsened it.Criticising the new finance minister, Dr Hafeez Sheikh, Zaidi said that “If Sheikh does even one-tenth of what he did when he was part of the Zardari government, then you can only imagine where we are headed.” He said that things could be much worse now.Bengali said that the responsibility for the current crisis did not lie with this government, but with all prior governments from the last 25-30 years. He said that it started after the 1999 military takeover, when an imported finance minister [without naming Shaukat Tarin) who then became the prime minister was brought in who brought an imported team of technocrats who were all employees of international financial organisations.“Now all financing organisations never want to talk to you unless and until you have IMF clearance,” Bengali said. “If they didn’t create such conditions, then we wouldn’t have needed to go to the IMF.”NTUF discussionBengali was also the main speaker in a discussion on the same topic organised by the NTUF and the Home- Based Women Workers Federation.He said that the government had already gone bankrupt and it did not have dollars in its foreign exchange reserves nor did it seem to overcome the trade deficit challenge. He said that the country’s exports were of $24billion against the imports of $60billion and there was no way out of this situation but public-friendly policies.He said that the inflation rate in the country was expected to rise to 20 percent in the coming days because of the wrong policies of the government under which it had dealt with the IMF. The renowned economist said that more people would lose their jobs and the inflation would go up because the government surrendered before the IMF to seek the bailout package.“The IMF has no sympathy with the public. It, like all the banks, is only interested in getting its money back,” he said, adding that government’s practices and policies were similar to those of General Pervez Musharraf’s government.

from The News International - Karachi http://bit.ly/2Z94nvQ
The News International - Karachi