Pakistan surrendering before the International Monetary Fund (IMF) for the revival of the stalled $6.5 billion bailout package is not a new thing for the masses to hear, we have seen such surrender in the Imran Khan govt’s tenure too. Sad thing is that this surrender has taken place when Ishaq Dar is Finance Minister, who claimed before replacing Miftah Ismail that he knows how to deal with the IMF and that he will not bow down before any demand, but the situation is different now.
The IMF has given a tough time to Pakistan and has asked for structural reforms for the revival of the stalled loan programme.
It emerged after a round of technical talks between the Pakistani authorities and the IMF delegation, which is visiting Pakistan for the ninth review under the Extended Fund Facility (EFF), concluded on Friday.
Sources said the IMF had asked Pakistan to impose new taxes worth Rs500 billion to overcome circular debt and consequence of slow privatisation procession. It would be impossible to meet the expenses if new taxes were not imposed, the IMF delegation told the Pakistani authorities. It had also demanded immediate increase in levy on diesel to achieve the tax collection target.
Sources said a final decision about imposition of sales tax on petroleum products would be taken in the policy-level talks between both sides. The finance official will later present the demands of the global lender to Prime Minster Shehbaz Sharif for approval.
Pakistan is to be reimagined as the poster boy of structural reform that used to be dismissed as a neoliberal fantasy. Economists of all reckoning are vying to fit into a technostructure of the future.
With the rate of inflation at 27.6 % and expected to rise steeply, food beyond the reach of the poor and the lower middle class and the fuel cost hitting even the middle and upper middle class, the common perception seems to be that things have to get worse before they get better.
Do not spend more than you earn. Tax the rich and the privileged directly and target the poor and the low-income groups for subsidies. In the past, the governments got away with serious deviations and lukewarm reform efforts by pressurising IMF through the US and European members of its Board in exchange for services rendered as the most allied ally during the Cold War and the non-NATO ally in the War on Terror. Since the withdrawal from Afghanistan, the West has lost interest in pushing the IMF around.
