Prime Minister Imran Khan has vowed to make an independent foreign policy that will serve the interest of Pakistan, not other countries. But the biggest challenge for Imran Khan is the economic policy that is still dependent on international institutions. The government is unable to give any relief to the people because, otherwise, the IMF will disapprove of the bailout. Thus, the IMF decides the economic policy, not the government.
Pakistan does not have an independent economic policy and the PTI government is not the only one to blame for this. Previous governments and regimes had knocked at the IMF’s door to bail out the economy in their respective tenures. It all started in 1958 when General Ayub was in power. However, Pakistan got its first bailout package in 1965. It is interesting to know that democratic governments received more loans as compared to military governments.
Former prime minister Zulfikar Ali Bhutto went to the IMF three times while Zia-ul-Haq went twice. Under the leadership of Benazir Bhutto and Nawaz Sharif, Pakistan went to the IMF five times and three times respectively, while General Musharraf went to the IMF two times at a relatively low-interest rate. After the tenure of General Musharraf, democratic parties – PPP and PML-N – crawled back to IMF again, securing the highest and second-highest bailouts in the history of Pakistan respectively. And IMF was very happy with both of these parties.
Imran khan, when he was in opposition, used to lambast both PML-N and PPP for burdening the economy with massive debts. Before getting elected, he promised that he will rather attempt suicide than go to IMF, but ever since he became Prime minister, Pakistan still approached IMF for a massive amount. So he failed to break the pattern that he used to mock.
Opposition is not in the position to call out the government on these bailouts, and they have the 47 percent of the total IMF loan in their portfolio, with PML-N having 35 percent. However, they usually call out Imran Khan for giving in to the pressure by IMF and its very hard economic terms that make the working class suffer. PMLN used to get massive loans from IMF as well, but they did not implement the hard terms of IMF on people while managing a lower current deficit as well. In fact, IMF was very happy with the performance of PML-N in its review report.
Meanwhile, the PTI government did not put much effort to persuade IMF to make its terms go a bit easy on the Pakistani economy. In fact, the ministers act upon IMF wholeheartedly. They announce very proudly when they get the bailout. The level of dedication to IMF is so high that the members of PTI came to the Senate with their oxygen cylinders to vote for a mini-budget.
The PTI government cannot be solely blamed for dependence of Pakistan’s economy on the IMF; however, Imran Khan and his aides are not doing enough to get out of this mess. Other than the reshuffling of the finance ministers one after another, the government did not bring any convincing policy to fix the economy.
Currently, the government is taking loans to returning loans, external debts are increasing rapidly, the value of the rupee is decreasing every day, massive tax is also being collected resulting in the highest inflation ever, and somehow, mysteriously, we still do not have enough.
When you rely on IMF to run your economy, then IMF will definitely dictate to you how to make economic policy. If the government wants to be independent in its decision making, then it needs to come up with a long term plan. Taking loans to returning back loans is not even a proper short-term solution, let alone a long-term solution. For making Pakistan financially independent, only three things are to be done; manufacturing quality goods and exporting them, making markets of Pakistani services into the foreign world and most importantly, reversing the flow of money in the Pakistani economy.
Currently, a huge sum is leaving the Pakistani economy and being deposited in the economies of other countries. The elites of Pakistan buy extravagant properties in London rather than their own countries. The corrupt steal massive amounts from Pakistan and deposit them in Swiss banks which is a massive blow to our economy. Pakistani government needs to communicate with Swiss authorities and take this money back to the country. It also needs a long-term plan to reverse the flow of money from abroad back to Pakistan so that we do not have to go to the IMF in future.