Bunch of people are having disagreements between Pakistan and IMF fund`s current stabilization policy programme. The question is whether Pakistani policy makers should end this IMF policy programme prematurely or not?
It is still difficult to answer out that! Let us have an analysis that whether IMF recipe is enough to sort out the economic issues of Pakistan:
- This IMF recipe is a vital and crucial government priority. Pakistan can likely to continue with its gradual fiscal consolidation by supporting this recipe. Sufficient space for all of the public investment projects can also be carried on through this recipe.
- To have a prominent existence in this global financial environment, Pakistan needs to stick with this IMF recipe. One thing should not be missed out that IMF has all the time used its waivers so that they can liberally accommodate us on our missed targets. Pakistan’s missing presence in global financial environment cannot be tolerated.
- If IMF recipe will be ended prematurely then it will be difficult for our economic recovery to pick up speed. Prematurely ending this program might let to witness lethargic economic performance.
- Government might not get successful in tackling and handling the challenging problems. Investment shy private sector and global commodity price slump might not be able to get encouragement.
- Ending IMF programme will lead to cotton crop`s failure and government will be far behind to managee financing for many of the CPEC projects.
It would be better for Pakistani government and country`s economic team to convince the IMF by presenting their cost benefit analysis. In this way, country`s economic team might be able to get temporary relaxation on their IMF agreement. It can be said with assured that performance of the capital and also currency and all of the commodity markets lies on IMF recipe. Stable and productive approach can do wonders for Pakistan’s economy.
If IMF will continue be having strict terms then it would be difficult for the country`s economic managers to stabilize their ambitious growth. It is the need of the hour that IMF should remain accommodative by pursuing a waiver policy. These suffocating conditions related to IMF`s loan agreement should not be entertained rather public financing should be promoted.
Growth with IMF recipe? by Afshan Subohi 04/01/2016