This refers to the news report ‘‘Good news’ soon about restarting IMF programme: SBP governor’ (Jan 12). The State Bank’s governor is quite optimistic that the revival of the stalled $6 billion IMF programme will be good for the country. The nation, however, must brace for the inevitable increase in the rate of utilities; currency depreciation; more indirect taxes; consequent higher inflation; less development spending; and a loss of jobs. The business community must be prepared to face tight monetary policy, including a credit squeeze and a high interest rate, that will discourage investment and exports. The nascent economic recovery will be put on the back burner.
The losers will be 220 million Pakistan while the beneficiary of the programme may be the rulers in power who are facilitated to take more loans to project artificial financial stability while passing on the burden of huge loans to the next government. The previous two governments did this and now the current government is following the same path.
Huma A Majeed
Karachi
