Halfway through its honeymoon period, the Imran Khan government continues to flounder on its promises while compensating its incompetence with ever heightening rhetoric against political adversaries. Where is that much touted 100-day panacea to all our ills? Nobody knows.

Pakistan requests IMF for bailout package



An anti-climax seems to be coming too soon to the populist demagogy. We were supposed to witness the breaking of the proverbial begging bowl, but have instead been doomed to extended efforts to knock at every available door for possible alms, on whatever terms, after having found it hard to cash on the plundered billions of dollars.

First, Prime Minister Imran Khan tried the Saudis for their mercy – cash, deferred payment of oil, investment in mining and oil exploration, partnership in CPEC, etc – and went on to amateurishly squander with our part OF Belt and Road Initiative (BRI). Now, after exhausting the possibility of plugging easy cash from our friends, we are back on the beaten track of the IMF’s structural adjustment programme for stabilisation. For weeks, the finance minister refused to read the writing on the wall, and shrugged the option till the stocks fell to the lowest ebb and reserves plunged to a mere $8.2 billion,.

Estimates indicate the need to mobilise $31 billion to plug the current account deficit as the monthly financial deficit persists at $2 billion. According to reports, we need $10-12 billion in the current fiscal year and wish to seek, at least, $7.5 billion – the highest ever bailout package from the IMF. The Asian Development Bank is inclined to provide $7.1 billion and the World Bank is also likely to finance certain governance reforms and infrastructure projects.

The government, led by a party that has been shaming the previous two governments for pushing the nation into a debt trap, will end up adding approximately $30 billion debt in two to three years, increasing the current 73 percent debt-to-GDP ratio. Already, the PTI government is on the path of meeting the prerequisites of entering into an agreement with the IMF. But the IMF’s demands are much stricter than what has already been done. The measures taken in the supplementary budget were not enough to meet the IMF’s standard recipes. There is no serious effort at expanding the tax net, nor any serious thinking about increasing exports or making reductions in the superfluous sides of defence expenditure.

The IMF is seeking: “Additional decisive policy action, anchored in a comprehensive strategy, and significant external financing will be needed in near term. Policies should include more exchange rate flexibility and monetary policy tightening, further fiscal adjustment anchored in a medium-term consolidation strategy, and strengthening the performance key public enterprises together with further increases in gas and power tariffs.”

This means that the exchange rate will go beyond Rs150 a dollar, inflation and interest rate will go into double digits, development expenditures will be further cut down, fuel prices will go up from already increased rates, growth will come down from 5.8 percent to less than the estimated 4.8 percent of GDP, unemployment will increase and the government will be constrained from launching its grand plans of building five million houses, 10 million jobs and five billion trees. That is why Prime Minister Khan has already raised the ante of the accountability drive, the demolition of illegal structures and now an empty “clean and green Pakistan” campaign starting with the monitoring of the few public toilets that we have at gas stations (sic).

Without deeply understanding the dynamics of grand CPEC project(s), Pakistan is embarking on the path of adding its own wish list to an already gloated project. Being the largest trading and manufacturing power, the Chinese don’t have a problem fulfilling Khan’s thoughtless dreams. Unlike this government, which is extremely confused about its development strategy, the PML-N government had a clear but ambitious infrastructure development plan focusing on energy and highways.

The focus should have been on developing our own productive base of industry and agriculture, knowledge and technological knowhow. Thanks to an adverse bilateral trade regime, all kinds of the Chinese cheaper goods have eroded whatever the capacity we have had. Much resources were wasted on rail and metro-bus services and motorways, rather than acquiring even necessary skills and productive means. The Chinese have a well thought-out long-term plan, while we don’t have even a realistic short-term perspective.

By entering into the IMF structural adjustment programme, PM Khan should be forgetting about his rhetorical uplift plans for the poor, which lacked any serious contemplation. He moves from one extreme of the older state of Medina to the neo-liberal paradigm of concentration of wealth in a few hands at the cost of all working people while ending up increasing the gap between the rich and the poor. His economic ideas are foolish, such as raising revenues through donations and bringing down inflation through the recovery of ill-gotten money.

Khan could still have picked up certain doable 100-day promises, like the creation of a Seraiki province and integrating Fata with Khyber Pakhtunkhwa. Rather than doing that, he has for all practical purposes scrapped provincial autonomy, at least in two provinces, and is on his way to deal with Balochistan in the same autocratic manner as those before him, and by-pass Sindh on Karachi. His ideas on education and health are also quite simplistic. You can’t have the same syllabus for seminaries and public schools; he may just end up turning the public schools into madressahs. Even his austerity measures – like turning the purpose-built PM House and inherited Governor Houses into university or playgrounds – are outlandish and add up more fiscal liabilities. Khan could simply cut down the extra fat and the ostentatious lifestyle of ruling elites. He is obsessed with provincial subjects through his hand-picked chief ministers, while abdicating his authority in some of the most crucial federal subjects.

Having nothing to present in more than half of his honeymoon period, Khan is left with nothing except riding the high tide of selective accountability. As he had promised, he should have brought the issue of corruption and accountability, including reforming NAB and improving NAB Ordinance, to parliament. He also should have brought about systemic reforms to eradicate corruption and introduce a comprehensive system of accountability of all. But, like all other charming slogans, the noble notion of accountability has also been vulgarised for political ends. The accountability drive that was focused on Nawaz Sharif before the general elections has now shifted to Punjab – where PTI rules with a razor-thin majority – with the arrest of Shahbaz Sharif in a bizarre case just before the crucial by-elections.

The whole accountability process has become so politicised that even substantial cases of accountability will be seen as political victimisation. The current rulers seem to be over-burdened with the demands of over-burdening super-structures. Coupled with a terrible financial crisis, the political crisis can soon engulf the entire country, which could further undermine the democratic transition. We have already been ‘unburdened’ of press freedom and due judicial process. Soon we may lose whatever worth is left in a divided parliament. One wonders: where will we end up?

The writer is a senior journalist. Email: [email protected]

Twitter: @ImtiazAlamSAFMA