espite availing of International Monetary Fund (IMF) loans nearly two dozen times, the people and the politicians of Pakistan still harbour a grudge against it, mainly due to the bitter pill it prescribes with the bailout package. For over a decade now, the IMF has been trying to give a humane face to the strings attached to its support. It no longer insists on indiscriminate painful structural adjustment programmes; instead, it insists that borrowers should spare resources for essential social spending, such as health, education, and/ or targetted subsidies.

Most of our governments stuck to the commitments made with the Fund until they received the early loan tranches. They violated their commitments and tended to spend profligately before elections leading to a rupee (fiscal) and a dollar (current account) deficit. Their successors then had no choice but to approach the IMF again with a loan request to soothe the post-election hangover.

The corrective measures agreed upon with the Fund in the letters of intent for the last three programmes availed by the PTI (ongoing programme since 2019), the PML-N (September 2013 to September 2016), and the PPP (from 2008, which concluded prematurely in 2010) have a lot in common. All three governments agreed that Pakistan’s economic woes originated from a lack of implementation of the “much-needed” structural reforms, half-hearted revenue collection, cross-subsidisation of the losses in state-owned enterprises (SOEs), politically motivated decisions by the State Bank of Pakistan (SBP), and the energy circular debt.

Not only do politicians across the political spectrum know what is hurting national economy, they also know how to cure it. The cure lies in non-populist reforms that many politicians dare not enact under normal circumstances. Such reforms are often only feasible if the government is “coerced” by the IMF. The government then blames the “irresponsible attitude” and “economic mismanagement” of its predecessors. For its part, the opposition accuses the government of taking heartless economic measures under IMF influence.

Much-needed economic reforms then become a casualty of such politicking. That the incumbent government had harshly criticised the then government in its opposition days does not help. Let me explain.

Blaming the Shaukat Aziz government’s economic mismanagement, the PPP government approached the IMF for a bailout package. It committed itself to enhancing revenue administration (including general sales tax), managing energy circular debt and tariff differential subsidies by increasing electricity tariffs, ending the SBP provision for buying furnace oil, moving to a single treasury account and strengthening the social safety nets. The government faced strong resistance from the PML-N, especially on GST harmonisation and hike in electricity tariffs. It also had to leave the IMF programme mainly due to the devastating floods of 2010-2011.

The PML-N, despite its opposition to the PPP-led structural reforms, committed to similar reforms under its IMF programme. It pledged to enhance revenue administration, introduce a rationalisation plan for gas prices, give autonomy to the SBP, reduce SOE losses, sort out the energy circular debt, initiate revenue-based loadshedding, and eliminate exemptions and concessions granted through SROs etc.

The opposition parties (the PPP and the PTI) then beat the PML-N government with the same stick and strongly criticised its commitments to the IMF. With about a dozen waivers (exemptions) on its commitments that the PML-N government could not fulfill for fear of losing political capital, the IMF programme was successfully completed in September 2016.

However, in the run-up to the 2018 general elections, the PML-N government resorted to populist measures and went on a spending spree. The government formed after the polls then had to go back to the IMF.

The PTI, a staunch opponent of PML-N’s IMF programme, did not seek an IMF loan for ten months after coming to power. However, one-off deposits from friendly countries proved no substitute for the structural reforms necessary to stop Pakistan’s economic hemorrhage. The PTI government finally went to the IMF in 2019, making essentially the same commitments as its predecessors, the PML-N and the PPP, had made when they were in power. The PTI faced severe criticism from main opposition parties (the PML-N and the PPP), especially over increasing energy prices, withdrawing GST exemptions and giving autonomy to the SBP under IMF pressure.

After a successful vote of no confidence against Imran Khan-led PTI government in April 2022, the PDM alliance (comprising the PML-N, the PPP and some others) came into power and, after an initial reluctance, is taking the IMF programme’s prior actions to ensure a resumption of the programme.

All three parties, when in opposition, have criticised the government for making life tough for the people of Pakistan under the IMF diktat. The only difference among their IMF programmes was that commitments unfulfilled in one programme became “prior actions” for releasing a loan tranche under the following programme. The mandatory prior actions made the IMF programme painful for the people and the government.

Two things are very clear from Pakistan’s engagement with the IMF over the recent decades.

First, when on opposition benches, most political parties oppose economic reforms without offering any implementable alternative plan. They claim a political victory when the government succumbs to their pressure and deviates from the commitments made to the IMF.

Second, when on treasury benches, the same parties are forced to approach the IMF “to clean the economic mess” left by their predecessors and thus refuse ownership of the programme. If they want to take ownership and work on bringing reforms, they lose political capital and popularity.

This is the context for the charter of economy or a “consensus on economic reforms” that several organisations, including the Sustainable Development Policy Institute (SDPI) have been proposing since long. The incumbent prime minister had in this spirit, offered cooperation on economy in 2018 as leader of the opposition in the National Assembly. As leader of the House, he has reiterated the proposal.

Meanwhile, political polarisation is at its peak. Talks for consensus building among political parties even on a minimal economic agenda sound unrealistic.

Major political leaders should remember that they have tried to address Pakistan’s economic issues while in power and have opposed the same corrective measures when in opposition. The lose-lose approach will hurt them in the future and the people of Pakistan consistently.

Anyone among the three mainstream parties could lead the government after the next general elections. They would be tasked to address the economic challenges faced by the country. Forging a consensus on the economic way forward today will make their lives easier.

Economic security is the central pivot of Pakistan’s national security and an essential part of its national security policy. All stakeholders, in and outside the parliament, should ensure Pakistan’s economic security and sovereignty. We propose that like the National Security Council, a statutory body possibly called the Economic Security Council – comprising the prime minister, the leaders of the House and Opposition in the Senate, cabinet members looking after economic and energy ministries, chief ministers of all provinces, and representatives of the armed forces of Pakistan – should be constituted.

The council should deliberate upon economic challenges and take collective ownership of the much-needed short-term, medium-term, and long-term policy and structural reforms – with or without an IMF programme. It should also forge a consensus on possible relief measures to insulate the people of Pakistan from the effects of such reforms and suggest measures to strengthen the existing social safety nets.

Such a forum or any other forum representative of all stakeholders would provide much-needed certainty to Pakistan’s development partners and people amidst the ongoing political uncertainty, which, in turn, has led to economic uncertainties. It is time to think beyond partisan interests.

The writer heads the Sustainable Development Policy Institute and tweets @abidsuleri