Monday May 16, 2022

Burdensome loans

January 22, 2022

This refers to the news report ‘Growing financing needs: Pakistan may have to seek new IMF loan’ (January 18). Despite the National Security Policy’s recommendation to stop taking loans, one fears that the restoration of the $6 billion IMF deal – and the subsequent harsh conditions agreed to by the government – is only a precursor for a bigger IMF programme.

The country’s overall external financing requirement will cross the $30 billion mark in the next fiscal year. Given the state of affairs, there is no way the government can avoid a second IMF loan without fundamental reforms and ruthless austerity. Strangely, the government’s economic planners do not have any plan on the table to shore up the external account to avoid such a loan. It seems that the prime minister is being misled by his economic managers and has not been apprised of the factual position. If the PTI government opts for another IMF package, it would be the first time that a sitting government had to resort to two programmes during its five-year term. For a prime minister who vowed to pull the country from the IMF’s bondage, this should be a matter of shame.

Arshad M Khawaja