The finance minister claimed that Pakistan complied with all conditions laid down by the IMF to continue the loan programme but it came up with new conditions every time the previous ones were met. Whether the IMF will extend Pakistan the loan instalment or not has turned into a mystery, which reminds me of what Churchill famously said about Russia: “It is a riddle wrapped in a mystery inside an enigma”. IMF’s attitude toward sanctioning loans is more of a lollipop dangling before us to squeeze the best deal to suit the US foreign policy. Without any doubt, the main issue behind the scene is inevitably linked with regional geopolitics. The CPEC is the main cause of contention.
The IMF bailed out Sri Lanka which had declared bankruptcy by granting about $3 billion to rejuvenate its economy and reform agenda. But Pakistan has been denied such a gesture although it never declared bankruptcy. The IMF, which according to John Perkins author of ‘The New Confessions of an Economic Hitman’ hunts for new IMF borrowers to entangle them in the web of borrowing in such a way that they never get out of it. Perkins must have retired but his pals succeeded mightily in getting Pakistan addicted to the IMF borrowing programmes until the CPEC emerged on the scene.
Prime Minister Shahbaz Sharif recently met the IMF managing director when he visited to attend the New Global Financing Pact Summit held in Paris. He explained to the IMF MD the economic hardships the country’s economy faced and tried to convince her to approve the release of loan instalments. If this attempt didn’t succeed, the Fund programme under the $6.7 billion Extended Fund Facility will expire on June 30 this year.
As a blessing in disguise, it’s in our greater national interest that the IMF denies the loan instalment. It will teach us to live within our means, stand on our own feet and exercise austerity. Presently, if we, the taxpayers, look at the government office buildings, it seems as if we were a nation loaded with wealth to expend on lavish structures. The seven-storey building of the Punjab Agriculture Food and Drug Authority (PAFDA) situated on 64 kanals of extremely expensive commercial land near Thokar Niaz Beg on Multan Road is enough to explain the wastage of taxpayers’ money. What progress the province has made in agriculture is anybody’s guess.
Let’s recall Reko Diq when a maverick judge cancelled the contract for lack of transparency and malfeasance.
Surprisingly, the experts who discuss the IMF loan on the TV or write in the newspapers never highlight the CPEC project which is a lifeline for us and equally favourable for China’s economic interests in the region. On the other hand, the US is fighting a losing battle against the expanding Chinese economy and China’s influence in the Middle East countries. We never heard of Saudi Arabia selling oil to China in Yuans – Chinese currency, instead of the US dollar. De-linking the dollar from oil prices will plummet the US dollar’s value. As it is, the US industries only manufacture military weapons to export and also the superpower must continuously wage wars to keep the wheel of its industry churning.
The Prime Minister recently stated in a high-level meeting how to pull the country out of the present economic downturn. He emphasized in the Special Investment Facilitation Council how to put the economy on the fast track by using indigenous resources in the country. How to reduce the bureaucratic impediments and adopt a one-window operation. What he didn’t mention was cutting down the massively top-heavy bureaucracy, its perks and privileges and security protocols. It’s well known that a justice of the Supreme Court gets Rs1.5 million salary a month, meaning Rs50,000 every day, not to mention luxury vehicles, a free house and staff therein to serve his lordship. Or the recently revealed mind-numbing privileges of the senate chairman whether serving or retired. Now an economy on the verge of collapse cannot afford such contradictions between the privileged and the unprivileged. Needless to point out, the tab for the high living of the politicians and bureaucrats has to be picked up by the taxpayers.
The Prime Minister underscored the need to develop the existing resources, including metals and minerals in Balochistan, to earn foreign exchange. Let’s recall Reko Diq when a maverick judge cancelled the contract for lack of transparency and malfeasance. By then, the Australian company and its Chilean partner had invested about $250 million in the import of machinery and equipment to explore and process nearly $260 billion worth of copper and gold. The company sued Pakistan in the international court for abrogating the contract. However, the Prime Minister’s aspiration to turn the national economy to hit $1 trillion by 2035 by bringing in foreign investors looks rather too ambitious. The government will have to set new priorities and slash its administrative expenses.
The writer is a Lahore-based columnist and can be reached at pinecity @gmail.com