By Rehmat Ali Raazi
here is an old joke about a Sikh youth. He was professing in the market as if he is high on weed. Another Sikh, passing by, asked him: “Harnam Singh, don’t you think you’ve drunk too much today?” The Sikh youngster stared at him and said after a moment: “Oh no, my friend has just gone to take a bottle.” Probably something like this has happened to us too. There is still no announcement of $6 billion loan by the IMF but the wave of happiness and satisfaction is running high in government corridors. So far, the officials of Pakistan and the IMF have just agreed to debt terms. The loan is still to be received and so does the announcement.
The whole situation is just in accordance to an English saying that there is many a slip twixt cup and lip’. The point to ponder, however, is that can someone express happiness on having the debt? Before crediting this loan to Pakistan, the way the IMF has made Pakistan to accept its strict terms, is not an occasion of honour for us and not even the government of Khan has accepted it happily. The compulsions have made them to do this. The people who looted the nation and the country have made us manifest these distressing days that even before receiving the loan, an official of the IMF has been attached with the State Bank of Pakistan. Pakistan is also made to declare and accept that the State Bank of Pakistan will be an autonomous institution and it will not have any control on the dollar. Thus, the dollar price will be uncontrolled.
The new governor of the State Bank of Pakistan, Raza Baqir, has done the same thing in Egypt upon the instructions of the IMF and the reports have yet to reach us, the Pakistanis, about the way the Egyptian currency got humiliated against dollars. The end result of the economic reforms that were introduced in Egypt under the leadership of Raza Baqir resulted in the threefold increase of the below-poverty line population. The finance minister of Egypt, Dr Maaid, has already admitted to the reality and warned Pakistan about it.
What is the fault of anyone else if it is we who are not considering any warning? Sources have confirmed the information that upon the terms and order of IMF, NEPRA will also be made an autonomous institution. In plain words, we can say that the government would have no control over the institution of ‘NEPRA’ that determines the prices of oil, gas and electricity in Pakistan. And so this institution along with the IMF will suck the blood of the Pakistanis and will determine its price in accordance with the financial and political interests of the IMF.
Who will be the safeguard of the interests of Pakistan and the public of Pakistan? The loan is not received yet conditions have been accepted to impose taxes of Rs700 billion on the public in July 2019. By now, dollar is at Rs151. Possibly, the IMF might be kind to release the first installment of $6 billion (which is only $2 billion) to Pakistan before the imposition of the taxes and the presentation of the budget. The second installment will be paid after a year and the third installment will be paid by 2021.
The question is that when did Pakistan not go to the world financial institutions in the last seven decades for loans? Pakistan became the member of the IMF on July 11, 1950, only three years after Pakistan came into being and in the past 69 years, it has gone 21 times to the IMF for the acquisition of loan. The condition of India is far better than us. When we did a little research while writing this column, this thing was not only surprising for us but mysterious too that India did not go to the IMF from 1993 till 2019 as if India did not have to extend hands in front of the IMF.
But our condition is that Pakistan has not stopped taking long term as well as short term loans. The agreements between Pakistan and the IMF before 1988 were based on short terms in which the debt was not subjected to economic reforms. However, after 1988 structural adjustment programs were launched. And these structural adjustment programmes (SAP) are those in which the lending organisation provides new loans to the countries with severe economic problems upon specific terms and conditions. The loans that the member countries of the IMF get are actually from their own money.
Each member country pays their part to the IMF and in exchange to this payment, the IMF allocates a quota and within this quota, one can take loan from the IMF. And if a country wants to have more debt than its specified quota then this debt will be conditional and the debt taking country has to fulfill the requirements and conditions based on some economic reforms. Previously, to secure loan from the IMF was relatively easier for Pakistan because America used to come forward to help instantly. But the situation now is quite different. Now, Pakistan has to rely on its own intelligence to take dollars from the IMF. Probably, that is why the problem this time is a bit complicated and tough.
Pakistan has to rely on its powers and wits to secure dollars from the IMF. And for these reasons, issues are a bit complex and tough. America wants to give a tough time to Pakistan. This time the real problem for Pakistan is not only the return the debt money to the IMF but it is also the non-implementation of the terms and conditions that were imposed by the IMF. It has been the ritual of Pakistan that it takes loans but does not meet the conditions it pledged at the time of acquisition of the loans. This time America is not supporter. That is why the attitude and the terms of the officials of the IMF are looking tough.
Once not the conditions fulfilled, it is difficult to get new loans and this is the time when Pakistan needs the recommendation of America. In this regard, our expert economists say that Pakistan fulfills some of the terms, gets recommended from America and IMF grant it new loans. The loan programme of 2019 is different from the previous programs in the regard that this time Pakistan has no recommendations from America and the US understands the Indian indications and wants to punish Pakistan for its closeness to China.
The way Pakistan has strongly rejected the US and Indian objections regarding CPEK, both countries (enemies of Islam and Pakistan) have not forgotten this snub. Their enmity is more dangerous than that of a camel. Pakistan got a great deal of US help in the IMF programme in Musharaf’s era because Pakistan was going to become a US NATO coalition partner. Same is the case in 2008, when the Obama administration wanted to establish relations with Pakistan while in 2013 there were recommendations of the Obama administration to get a loan from the IMF, but the situation changed after the Trump administration was in power.
Unfortunately, Pakistan is not getting any support from any quarter in Washington. We may accept or not but reality is that Pakistan’s embassy has completely failed in Washington as Indian and American conspiracies and schemers against Pakistan are on their peak. In White House and American Congress, no such professional lobbies exist that can pave the way for Pakistan. Unlimited capital has to be invested on these lobbies. Now, when Pakistan is looking for every single dollar, from where it will bring money to fill the lobby firms of America. In Washington, India is taking advantage of this weakness. This is the reason behind that this time Pakistan is totally reliant on the IMF and is following strict terms and conditions. In the past, the way our leaders (especially Benazir Bhutto, Nawaz Sharif and Asif Zardari) spent lavishly in the name of lending. And the looted debt was also shifted abroad mercilessly.
These frightful and deadly results were expected that are emerging now. Musharraf was also unable to considerably punish to these offenders. Sadly, Imran Khan has also been unable to bring back money from these looters. So now the whole country and the nation have to tolerate humiliation and abasement in front of IMF.
Our ideological, political and geographical global enemies laugh at us and say, “Is this the worth of nuclear Pakistan?” We are heartily afflicted by this satire but isn’t it a factual and a reality? If we examine the past record of debt by IMF, it would be apparent that Pakistan every time got $6 or 6.5 billion loans. According to the website of the IMF, Pakistan’s allocated quota is 2031 million SDR.
SDR is a type of currency which IMF and other institutions use for making transactions and on 10th May, the SDR was equal to $1.38. Pakistan want to obtain 255% debt of allocated quota which was almost equal to $6.3 billion. It has never happened that Pakistan takes debt and doesn’t return it. The IMF is not a traditional bank. Being an IMF defaulter would be identical to suicide. Not repaying the loan is equivalent to be separated from the international economic system.
The acquisition of loan from the IMF is the last resort to run a country’s economy. And if we default on IMF loans as well, then it means that we lose our economic value in the whole world and our every transaction will be dependent upon hard cash. So in order to avoid this destructive situation, Pakistan also begins to secure more loans to pay off the previous ones. The addiction of taking easy money has taken us to this point. When the pocket is empty and you are addicted to easy money, then in the state of compulsion the debt addicted auctions the assets of their home. He only needs money. For a poet, his most precious thing is his poetic collection. The sum of his lifetime austerity and hard work. For the sake of booze, the poet even sells his deewan.
Poet Abdul Hamid Adam describes this situation as:
Jaib khali hi Adm,
ma’i qarz per milti nahin!
Aik do botal pay
deewan bechne wala hoon me!
But it should be clear during the regime of Imran Khan as Prime Minister, there has been not effort to get easy loan for the first time. Pakistan already has taken 21 times loan from the IMF.
The thing to be considered is that in the last six decades (1958-2017), our which parties and their leaders were forced to beg from the IMF. It’s a matter of research and our research tells us that the government of Ayub Khan appeared three times before the IMF; the governments of Ziaul Haq and General Prevaiz Musharraf two times, the government of PPP (in the leadership of Zulfiqar Ali Bhutto, Benazir Bhutto and Asif Zardari) 10 times and PML-N’s government four times appeared before the IMF to get financial assistance. From this captivating research we realise that our military rulers went to IMF fewest time. Non-elected rulers have turned out to be better regarding financial and economic considerations from the elected ones.
They got a minimum loan on country while the governments of PPP beat all of them. If it is a matter of shame to go to IMF for financial bailout, then PPP and all its rulers will be considered and recognized as the most shameless rulers of our beloved country. Nawaz Sharif comes at the second number on the basis of corruption who was declared as a culprit by court and currently he is in jail. His daughter was also considered culprit in this regard. Our research data is enough to prove that in which party’s government Pakistan faces worst corruption. So now, is it fair to leave Zardari and his corrupt affiliates without giving them any punishment? Should corruption cases against them not be concluded soon? Is it not the spirit of justice to send those people in jail who plundered the country? However, it is also the demand of justice that the latest agreement of IMF and its agreed terms should be presented in parliament for debate.
We think that Imran Khan should also come in front of the nation to give explanations and in clear words, he should take the nation in confidence that what were the inevitable compulsions on the basis of which they acquired loan of $6 billion by accepting the strict IMF terms. He should tell this unfortunate nation that at any cost we have to pay the loans taken by former corrupt leaders and for this purpose we have to go through fatal taxes. He should also announce that if the nation is becoming the victim of financial malnutrition, then he is also reducing the salaries and privileges of his ministers to a half. If Imran Khan himself and his ministers are not ready to share this financial burden, then why would the nation support them? It’s strange that leaders acquire loan and public repay them. Leaders harm the nation and public suffers.
Poet Aans Moeen describes this condition as:
Yeh qarz to mera hay,
chukaye ga koi aur
Dukh mujh ko hai
aur neèr bahaye ga koi or!
Note: This Column is being published simultaneously in daily Taqat, weekly AZM (Urdu) and daily Business World, weekly Economic World (English).