According to newspaper reports, the International Monetary Fund is going to hold its executive board meeting on June 27 to discuss and approve the disbursement of $510 million tranche to Pakistan. With injection of the fresh money, the country’s foreign exchange reserves will cross $22 billion mark by the end of current fiscal year. The government may thump its chest over the approval of the tranche but will add burden to the national economy than any respite. The nation has already filled up to the brim as the present government has obtained at $15 billion loan in three years of its tenure. The media is infested with reports that the government is under pressure from the donor agencies to slap more taxes on the nation, but the same media is blank where the loan money goes. The fund officials are already evaluating the fiscal situation of the country to give another target for tax collections. After promises and assurances from Islamabad, the loan tranche will be handed over to the country.
It is the irony of the situation that the loan amount is delivered in papers and process of markup starts, but the actual cash is deposited in foreign banks. The nation is put to the process of debt servicing without receiving anything in hands. The talks are held in Dubai and the nation pays all the bills of housing and lodging not only of the Pakistani officials, but also the fund staff. That is the economy of Pakistan and the government ministers are not tired of claiming to convert Pakistan into Asian economic tiger. According to the government officials, a staff-level agreement has already reached with the IMF on the basis of the third quarter performance of the government. The $510m tranche will be transferred to the Pakistan’s account before the end of the current fiscal year on June 30. Again the government is happy in getting a certificate of satisfactory performance from the IMF without realizing that it is working under the fund’s dictation which wants ‘structural reforms’in taxation, energy, monetary and financial sectors and public sector enterprises.
The finance ministry gleefully announces after release of every tranche that Pakistan has ‘successfully’ met the IMF requirements without realizing that dictation is insult to the nation and tantamount to interference in the internal affairs of the country. No one know why the government needs such loans when it can manage this amount by adopting austerity measures and plugging the loopholes of corruption. The Benazir Income Support Programme is marred by flaws and corruption and costing the nation billions of rupees without any improvement in the lives of the poor. It is the time government must end the option of getting foreign loans and should try to manage the financial affairs within the indigenous resources.
