IMF: Friend or Foe

Pakistan and IMF have finalized nearly one billion USD loan, in their ongoing staff level agreement, as the second and final review of Pakistan stabilization program of 3 billion USD, approved in 2024. The relationship between Pakistan and IMF has been started in 1958 when the government of Pakistan has approached IMF for the loan of 25000 USD, since that Pakistan has reached out 24 bail out packages, proving that neither Pakistan nor IMF have tried to part their ways.

Despite the assistance and recommendations from international institutions, Pakistan’s economy has remained in doldrums which make people curious about the role of these edifices. Are the global powers and the international organizations such as IMF and World Bank want to strengthen the economy of the under developed nations or they are just using these states as a cash cow by harnessing the governments and the policies of the lenders? The ground realities manifest, international loans and bailout packages have exacerbated the woes of the states by overdue taxation, sway of inflations because of the usurpation of subsides and the curtailment of local industries due to the overextended roles of multinational corporations (MNCs), subsequently inculcate socio-economic unrests, giving more spaces to the foreign institutions to manoeuvre the system and institutions of the debtor, i.e. Pakistan.

John Parkins, an American economist and financial consultant exposes the dark face of international financial institution and their vicious intentions in his master-piece, ‘the Confessions of an Economic Hit Man’. Parkins argues, the primary focus of the global financial organizations is to develop economic unrests in the developing nations, ensued by the propagation of public opinion with the help of media and other interest groups, more importantly, the elites, that the state will become default unless and until the government will not take loans and advices from the global creditors: once the state falls in their trap, she will never come out from their clutches, as the people of Pakistan is witnessing from last seventy years.

Therefore, Pakistan should have to go for a long term economic reforms despite political stability as politics and economy are akin to each other. Moreover, the increase in local production to vitiate export-import gap, improvement in governance and the empowerment of its people, especially youth and women by equipping them with digital skills will surely lead Pakistan towards prosperity and development, rather focusing on external loans and aids.