Initially expected to formally take up the case of Pakistan in its third quarterly review of the 6.78 billion dollar bailout packages under the Extended Fund Facility, IMF currently expresses its contention with the State Bank of Pakistan (Amendment) Act 2014. The basic qualm arises with the government seeking to grant greater autonomy for the State Bank. Chief of IMF mission in Pakistan, Jeffery Frank, claimed that the issue lies within the amendment act itself. The IMF expressed the need to “revise” the legal changes made. In more bare terms, the government plans to seek full operational independence in its pursuit of financial stability and improved governance structure which includes internal controls. Something that doesn’t sit too well with an increasingly domineering IMF.
The stranglehold the IMF maintains over countries becomes most evident when states seek to implement more autonomy in their operations. In the case of Hungary, the government turned down a newly offered IMF loan in 2011 due to its onerous conditions and payment terms after its 26 billion euro expired in October in the same year. In addition to Hungary, Greece and Jamaica have desperately sought an exit plan that could save their economies from the IMF.
If the government chooses to show wisdom in this time, it will remember dearly that IMF harms more than it does heal. Massive debts have led developing countries to surrender their economies to international banks that have accumulated revenue thanks to their predatory lending policies sanctioned by private banks. A simple look at the “conditionalities” of the IMF should spell clearly who it seeks to empower and who it seeks to control. Privatization of state-run industries that lead to gigantic lay-offs without social security provision, currency devaluation, soaring costs of imports, land utilized ruthlessly for cash crops, a crippling reliance on international commodity markets to generate foreign currency needed to service debts - these are only some of the requisites IMF imposes.
Premised on vicious neoliberalism, the IMF functions by facilitating dysfunction in feeble economies. This expression of reservation should be seen as a blessing in disguise; now could very well be the time to free ourselves from the IMF that not only lacks transparency, threatens sovereignty but also forces taxpayers to help in poorly devised bailout programs. At the end of the day, once IMF is prescribed, it is the common man who bears the brunt of governmental negligence.
Tuesday, April 22, 2014
Pakistan: IMF Woes And Worries
Initially expected to formally take up the case of Pakistan in its third quarterly review of the 6.78 billion dollar bailout packages under the Extended Fund Facility, IMF currently expresses its contention with the State Bank of Pakistan (Amendment) Act 2014. The basic qualm arises with the government seeking to grant greater autonomy for the State Bank. Chief of IMF mission in Pakistan, Jeffery Frank, claimed that the issue lies within the amendment act itself. The IMF expressed the need to “revise” the legal changes made. In more bare terms, the government plans to seek full operational independence in its pursuit of financial stability and improved governance structure which includes internal controls. Something that doesn’t sit too well with an increasingly domineering IMF.
The stranglehold the IMF maintains over countries becomes most evident when states seek to implement more autonomy in their operations. In the case of Hungary, the government turned down a newly offered IMF loan in 2011 due to its onerous conditions and payment terms after its 26 billion euro expired in October in the same year. In addition to Hungary, Greece and Jamaica have desperately sought an exit plan that could save their economies from the IMF.
If the government chooses to show wisdom in this time, it will remember dearly that IMF harms more than it does heal. Massive debts have led developing countries to surrender their economies to international banks that have accumulated revenue thanks to their predatory lending policies sanctioned by private banks. A simple look at the “conditionalities” of the IMF should spell clearly who it seeks to empower and who it seeks to control. Privatization of state-run industries that lead to gigantic lay-offs without social security provision, currency devaluation, soaring costs of imports, land utilized ruthlessly for cash crops, a crippling reliance on international commodity markets to generate foreign currency needed to service debts - these are only some of the requisites IMF imposes.
Premised on vicious neoliberalism, the IMF functions by facilitating dysfunction in feeble economies. This expression of reservation should be seen as a blessing in disguise; now could very well be the time to free ourselves from the IMF that not only lacks transparency, threatens sovereignty but also forces taxpayers to help in poorly devised bailout programs. At the end of the day, once IMF is prescribed, it is the common man who bears the brunt of governmental negligence.
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