PAKISTAN UNDER IMF SHADOW:

Not so many months back when unrelated to the world economic meltdown we were nursing our own self-created default-cum-bankruptcy scenario and friend upon friend from the Far East to the oil rich brothers in faith were returning our mendicant’s bowl without a farthing in its bottom and the word IMF was having us scampering to the washroom, lota in hand; and we were in a hapless state of self denial, our unassuming friend, Fasihuddin, a former chief economist and adviser to the finance ministry, had softly told the puzzled populace that in view of the poor performance of the economy since 2008 with little prospect of immediate reversal, the possibility of going back to the IMF could not be ruled out and that in all probability the IMF shadow was likely to persist on the horizon of Pakistan.

Fasihuddin’s slim volume, Pakistan Under IMF Shadow discusses the historical evolution of the relationship with a focus on the period 1988 to 2004 when IMF’s involvement in the country’s economic management was at its peak. The treatise highlights the changes in the IMF charter, which provide the perspective for his study. How to prevent falling back on the IMF support again he answers by suggesting quantitative benchmarks in critical areas like fiscal deficit, balance of payments and the debt policy.

The adverse side effects of IMF interventions and the effectiveness of the programmes on which its support is based have been widely criticized. Fasihuddin quotes Jeffrey D. Sachs in The End of Poverty: “In the past quarter century, when impoverished countries have pleaded with the rich world for help, they have been sent to the world’s money doctor, the IMF.

The main IMF prescription has been budgetary belt tightening for patients much too poor to own belts. IMF-led austerity has frequently led to riots, coups, and the collapse of public services. In the past, when an IMF program collapsed in the midst of social chaos and economic distress, the IMF has simply chalked it up to the weak fortitude and ineptitude of the government.”