Tuesday July 16, 2024

Common man and latest IMF tsunami

By Senator Rehman Malik
May 19, 2019



It was the dream of the government to get the IMF loan at any cost & come what way.

All commitments to not to beg, but yet the government begged on their toes from the IMF and finally submitted to IMF and IMF wins the final round. Congratulations for allowing the tsunami of IMF unhindered to engulf the poor masses of Pakistan. This IMF dictated package to start giving sleepless nights as more growing price hike will now become a nightmare for the poor masses.

Pakistan is suffering in the hands of Peer-o-Cracy, half baked - dem-o-cracy and worst derailing Economic - cracy. We as nation love to work on ad hoc and day to day working instead of long term planning and solutions. Our system has failed to provide relief to a common man.

We spoil things then expect such things will be rectified through orthodox approach. We claim to have democracy but in reality the government does not take the issues of national importance to the Parliament. Where are our democratic norms?

None of the above system is helping the country rather we are seeing a theatre of blame games where we are playing with dirty blame games, also the powerful mafias and syndicates are controlling the black economy which is much bigger than the declared documented economy. I should say that this black money mafia is a parallel govt who gets the prominent appointments with dreadful and black influence.

In fact the IMF deal was already done as the indicators of depleting rupee and new taxes were the part of the conditions. The new economic team was brought-in to materialise the IMF and convert it into the form of an agreement for further mortgaging the nation. The deal of further mortgaging of national assets is done and so we must be ready for additional burden.

This deal coupled with other economic parameters suggests that the price hike will be like a bigger tsunami which will bring bigger monster of price hike and thanks to IMF lovers in Pakistan.

The public was expecting that the government would not increase the price of petrol as almost every cabinet member had denied any further increase in petroleum prices. It is fortunate to note that despite constant denials at all levels the price was increased at the cost of the peace of mind and happiness of a common man.

The price of petrol was increased by Rs9/- before the open IMF deal but it is said that it was also part of the covert deal with IMF. This increase will leave accumulative effects to escalate more price hike and people will come under more economic pressure.

The condition of the IMF to increase the oil prices was met and is further dreadful to note that the inflation in Pakistan has now reached to 9.41% from 8.82% in March only; the highest in last 5 years. Why it happened, obviously the government allowed it to go higher as the controlling parameters were allowed to behave freely and additional printing of currency notes and more internal and external loans attributed in the increase inflation

The common man has been further burned with massive price hikes in all commonly used items across the country during Ramazan. Instead of keeping a strict check and balance on vendors to ensure they are following a set price list, the government itself is involved in making the lives of people miserable by increasing the price of every item every now and then.

A view on the common italics are that meat sellers increased prices by Rs20 -50 per kg, mutton dealers have increased prices to Rs1050 /- from Rs950 /-, boneless meat is now being sold at Rs620 - 640 from Rs600/- per kg, chicken dealers are charging as high as Rs380 - 390 per kg, whereas in the last week of March, the chicken meat was being sold between Rs310 - 320 per kg. It is a picture of one item being consumed by the public.

Among non-perishable items, flour prices have been raised twice. Sugar prices have also risen to Rs70/- per kg from Rs65/- per kg. On the other hand, among vegetables, prices of onion have been increased.

Oil and ghee manufacturers also did not hesitate to increase the price of good quality cooking oil and ghee to Rs200/- per liter, after a jump of Rs20, as two months back it was being sold at Rs180 per liter.

Recently the government threw another inflation bomb on people by increasing the price of petroleum once again as a 12% increase in the price of petrol and 17% increase in diesel, light diesel and furnace oil has been announced. It seems as if the government is playing with the sentiments of people by first relaxing them with false hopes of no petroleum price hike and then actually making an increase over night. Petrol now costs Rs108 per liter and diesel costs Rs122.32 per liter.

It is unfortunate to note that this is still not the end of story as Pakistan is yet to deal with a fiscal budget 2019 ahead in few days and further taxes and price hikes will bring more burden on the economy as indirect and direct taxes are expected to be imposed. The post budget situation is going to be worst for a common man.

The budget deficit is another dangerous factor and how will the government be able to narrow down the deficit of 38 Kharab (i.e. 3.8 trillion) and at the same time how the govt will be able to do debt servicing.

The present Increase in Oil prices, decline in exports, rise in imports, increased price of utilities, debt servicing in the form of interest and repayments, increased taxes and duties etc. are the biggest challenges for the government. Apparently the government has neither shared such a plan before the Parliament nor before the public.

The only thing which has come true is that our begging bowl has been partly filled at the expense of the common man. The IMF is heartless and works with an agenda and that agenda should have been known to the government.

Moreover, the most alarming thing to note is that this new budget of 2019-20 will be made in the light of the IMF programme rather duly dictated by the IMF.

We are heading towards the inclusions of Pakistan in the list of poor and underfed countries known for their poverty and perhaps their economies are better

than Pakistan as they have at least improved their governance. Our economy has

gone even worse than Maldives now.

We have been advocating in the world that we are not the money launderers but at the same time we now have indemnity as state to allow whitening of the black money as state money. This state policy is going to damage the reputation of our countering in the international economic forums.

I pray to Almighty Allah to guide our economy handlers to follow the correct path to pull the country out of the present economic crises. The dependence of IMF is driving us gradually towards bankruptcy unless we act wise to avert it.

The writer is Chairman of think tank "global eye" & former interior minister of Pakistan. @Email: rmalik1212@gmail .com, Twitter @Senrehmanmalik, @GlobalEye_GSA, WhatsApp +923325559393