IMF pushing for reforms before lending instead of after giving loans

Written by The Frontier Post

KARACHI (INP): Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain has said that the honeymoon of International Monetary Fund (IMF) is over.
Talking to businessmen on Friday, he said that after decades of broken promises, the IMF is now calling for reforms before lending instead of pushing for reforms after providing loans, which is a big change.
Mian Zahid Hussain said that five preconditions of the IMF must be met to qualify for a 500 million dollars loan.
Pakistan has less than a month to implement IMF conditions which the government and the people consider a fundamental change in the IMF policy, he added.
The IMF decision is being taken as an interference in our political, economic and national sovereignty but at present the government has no other option as all friendly countries have turned away.
He said that for decades, before borrowing numerous promises were made, including eliminating unnecessary subsidies and tax breaks, increasing taxes, cutting spending and ending the promotion of the elite, which were never fulfilled.
The failure in carrying out reforms has led to a sharp rise in debt, while our governments, with the help of influential countries, have always focused on easing IMF conditions, which has led to a widening deficit and mistrust in international institutions.
He noted that Pakistan is now closer to China than the United States, which has fanned suspicions in the western countries, while the IMF also fears that their dollars will be used to pay off Chinese debts.
Mian Zahid Hussain further said that this year in April the IMF’s terms were not met on the assumption that the country could be run without loans and if better results were obtained then there would be no need for the IMF.
If some loans had to be taken, the terms would be lenient, but this assumption proved to be an illusion because the government was targeting success in the upcoming elections instead of financial discipline and economic stability, the outcome of which is in front of everyone, he observed.
He said that governance could not be improved while exports suffered due to hike in energy prices triggering trade and current account deficit.

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