By: Ifrah Fatima
The International Monetary Fund (IMF) is an international organization established in 1944 which
works to achieve sustainable growth, financial and economic stability in 190 countries under it
along with stabilization of international monetary system.
IMF Chronicles
Pakistan is one of the 190 members of the IMF since 1950 and has taken loans from the IMF
twenty-two times, the most recent occasion was in 2019 when Pakistan’s economy was
struggling due to high rise in global energy and commodities prices. IMF agreed to loan $6
billion in 2019 but suspended it as Pakistan could not meet the promised conditions. Now
Pakistan is in talks with the IMF about the undisbursed $3 billion as the country once again
faces a difficult time of high inflation and crippling economy. The upcoming budget of the
country which is yet to be decided depends upon the negotiations held on May 18, these
negotiations are ever so important as the economic stability of the country rests on the
decisions made than.
The real question remains, will the economic conditions of Pakistan actually get better if we take
more loan from IMF? Overtime, fingers were raised at the organization for the conditions of the
loan it provides the countries. It is important to know how these conditions are flawed in order to
understand how our economy can be affected in both the short run and the long run.
Intervention of IMF and their policies can be bad news for the economy of our country as
previously the countries which were forced to accept a policy that required them monetary and
fiscal restraint led to damaging the economy as it turned out that the slight slowdown of the
economy transformed into a full-on recession of the economy making the countries face severe
cases of financial troubles. IMF has a history of failing to make the right decisions and
implementing the right policies for the developing countries. The renowned economist, Mr.
Joseph Stigilz has accused IMF of following monetarist approach and failing to understand that
a lot of money supply systems can end up destabilizing if only one system is being stabilized
and this leaves the government unable to do anything while the economy tumbles down due to
negative velocity shocks.
The future of Pakistan under the IMF debts seems dark unless the government brings structural
reforms to elevate the public and private sectors while bringing regulatory reforms to use the
resources efficiently along with opting for progressive taxation. The economic diseases will not
leave this country alone unless we cut the string attached by IMF and get a firm hold on our
economic and financial future. The selfish and wrong decisions made by our leadership will
continue to push us further deeper into the endless pit of debt and our country would never see
the light of the day at this rate. The country cannot and will not progress until the people in
power genuinely want Pakistan to grow and prosper, these people should be chosen wisely as
further mistakes in choosing the leadership will just equate to pushing the country off a cliff. The
right decisions can only be taken place if the right people are in place to do so, our country
desperately needs are strong, tenable and corruption free government so that we finally can get
on a sustainable economic path.
