Loans from the IMF

Although I am currently in Canada, I am not unaware of the ongoing situation in Pakistan and the South Asian region. The economic crisis in Sri Lanka is becoming worse day by day. According to international analysts, other countries like Egypt, Lebanon and Tunisia may face a Sri Lanka-like situation in the near future. Some circles are making similar predictions about Pakistan.

The IMF is being blamed for the current price hikes and inflation rate in Pakistan. However, before blaming anyone, one should look into history. The IMF, which is headquartered in Washington, DC, was established during World War II in 1944. Its aims and objectives include global financial cooperation, economic stability, international trade, employment and sustainable economic development.

Today, the number of IMF member countries has risen to 190. It should also be noted that the IMF is not a donor or charitable organization, and it imposes strict conditions for loan repayment, even the interest rate on some loans is up to 14.5 per cent.

Interestingly, the first member countries of the IMF include our neighbours India and China, who joined the Fund in December 1945, even before their independence. So far, China has participated in IMF programmes twice whereas India has asked for the Fund’s assistance seven times. India last went to the IMF in the 90s, and as per its commitment managed to pay off all its debts along with interest successfully before the start of the new millennium 2000.

Pakistan became a member of the IMF in 1950, but joined the IMF programme for a $25,000 bailout package in 1958 under the Ayub government. Pakistan kept borrowing heavily from the IMF, and this practice of borrowing continued under General Zia and then intensified under the democratic governments of the 1990s. At a time when General Musharraf took over in 1999, India was saying goodbye to the IMF. The governments that came after General Musharraf also preferred to burden the country with more foreign debts.

Throughout our national history, our financial situation has seen the critical stage where we have had no other option but to approach the IMF at least 22 times. Today, the IMF’s outstanding purchases and loans have risen to more than $5,404 million, with Pakistan being one of its largest debtors. Unfortunately, we are once again knocking on the door of the IMF. Due to this huge debt, the Pakistani rupee is the weakest currency in our region as compared with India and Bangladesh’s.

I believe that the IMF wants financial discipline and reforms in the country to which it extends its loan facility, but irresponsible rulers, instead of investing in productive activities, use the loan money for building a luxurious lifestyle for themselves. This results in making people’s lives miserable. The inflation rate in Pakistan is rising steadily, and people’s purchasing power is decreasing. On top of it, a high dollar rate and expensive petrol are indirectly increasing the prices of every commodity.

Undoubtedly, ordinary people are quite worried about the future. But, our selfish elite class prefers its own personal interests and does not let any capable Pakistani, including myself, come forward to take the country out of crises. I firmly believe that loans must be correctly utilized in development projects; business activities should be promoted across the country; exports should be increased; special attention should be given to the IT industry, and the tourism sector should be strengthened.

According to our ‘dharma’, Pakistan is our ‘janam bhumi’ (birthplace), and unconditional love to ‘dharti mata’ (motherland) is an integral part of our faith. There are countless religious and cultural sites in Pakistan. If I ever get a government responsibility in my life, I am quite confident that I will be able to collect good revenue through faith tourism. Such steps will not only project the good image of our beloved country but also help the country repay its foreign loans including IMF loans.

The writer is a member of the National Assembly and patron-in-chief of the Pakistan Hindu Council.

He tweets @RVankwani