Shortly after its inception, Pakistan began to rely on foreign aid instead of getting its economy back on its feet. At that time the world was divided into two blocks. Pakistan was in the western bloc fighting against the Soviet Union. And the West, especially the United States, wanted to strengthen its relationship with Pakistan. So in the beginning, the aid to Pakistan was in the form of grants instead of loans. Grants to Pakistan during the first five-year plan of 1955-60 accounted for 80% of the total aid while the remaining 20% was in the form of loans. However, as time went on, the proportion of aid in the form of grants decreased and the proportion of loans to the aid received by Pakistan increased. Even in the 1990s, the ratio remained between 10 and 20 percent, and over time, the terms of the loans, which were initially very soft, became stricter.
Pakistan obtained its first loan from the IMF in 1965 under President Ayub Khan. By the 1990s, Pakistan’s debt burden had grown to the point where it began implementing the IMF’s Structural Adjustment Program. After the death of President Zia-ul-Haq, the interim government signed the agreement. One of the conditions in Benazir Bhutto’s deal with the Pakistani establishment to come to power in 1989 was that the program would continue. Then, after the end of Benazir’s first term, Nawaz Sharif came to power and continued this structural adjustment program. The Nawaz Sharif government was overthrown in 1993 and Moin Qureshi was made the caretaker Prime Minister, having held various senior positions at the World Bank from 1981 to 1991, including senior vice president. This interim government prepared a policy paper for the Enhanced Structural Adjustment Facility, which was ratified by Benazir Bhutto after she came to power for the second time.
In 1999, when Musharraf overthrew the Nawaz Sharif government, Musharraf appointed Shaukat Aziz as Finance Minister, holding various senior positions at the Citibank, including the President, for three consecutive decades. And it was no coincidence that Musharraf appointed Dr. Ishrat Hussain, president of the SBP, who had been the World Bank’s director in Central Asia. So Musharraf also set out to implement the policies of the IMF and the World Bank. Under Musharraf, these policies had become very clear. And since then, every new government has borrowed heavily from the IMF on strict terms.
As far as the current government of Pakistan is concerned, the government’s claim is that we do not have the resources to help the aggrieved people or our forces for the liberation of occupied Kashmir and Al-Aqsa Mosque. To send But on the other hand, it is this government that is throwing our economy into the same pit that the IMF has prepared for it. The government adjusts every budget and mini-budget of the country in accordance with the IMF’s policy directives, even though it is fully aware of the destructive nature of the colonial financial institutions. In an interview with the British newspaper The Guardian on September 18, 2011, before coming to power, Imran Khan had sternly warned, “Every country I know of that has gone to the IMF. Or the World Bank’s (loan) program, it made the poor poorer and the rich richer. ” Nevertheless, the IMF’s Communications Department confirmed on May 21, 2021, that the IMF program for Pakistan is still ongoing. “The expansion fund facility for Pakistan, which existed before the (Corona) crisis, is still in effect,” he said. So, on the one hand, it is claimed that the economy has taken a take-off position, while on the other hand, the real thing is that the economy is still rusting on the runway.
We will never see the end of our misery and economic woes, no matter who comes to power, because the capitalist system that is prevailing now has always kept us connected to the destructive policies of the IMF. The shackles of the IMF ensure that Pakistan sinks into debt and accumulates interest on these loans and then those loans increase to such an extent that the bulk of the revenue is spent only on the payment of this accumulated interest. Get it The IMF’s shackles ensure that the stability of the US dollar is ensured by stifling Pakistan’s economic activity and cutting spending in the public interest. The IMF’s shackles ensure that the amount of taxes levied on the people continues to increase and that energy prices continue to rise through the privatization of the energy sector so that Pakistan’s economy can breathe a sigh of relief. And the IMF’s shackles ensure that Pakistan’s industry survives so that it can continue to export cheap goods to Western economies, such as sports goods and clothing, while our economy is always dependent on expensive Western imports. Needed such as agricultural and textile machinery and electronics etc.
According to the IMF, the fiscal deficit is the most important factor that adversely affects the economy. Popular Time (SAPs) Structural Adjustment programs that are proposed to poor indebted countries are aimed at reducing the same fiscal deficit. But the fact that “the fiscal deficit is the root cause of the country’s economic instability” is nothing more than an assumption. The validity of this assumption and the benefit of reducing the fiscal deficit is in itself controversial in the eyes of Western economists.
Developed countries, including the United States, reject this notion, especially when the economy is in economic depression. The US fiscal deficit is the largest in the world. Professor Robert Eisner, a well-known economist, writes in the May-June 1993 issue of the Harvard Business Review: “Our (US) fiscal deficit is not our first economic problem, if at all. It should also be considered an economic issue. ” US President George W. Bush said in his February 2003 State of the Union address: “Tax cuts and increased investment will stimulate the economy.” The same policy was followed by former US President Reagan. Under Reagan, the United States suffered its worst economic depression since the 1930s, with unemployment at 8.4, unemployment for 10 million people, and budget deficits skyrocketing. However, Reagan writes in his diary of the move: “Since it happened, I thought that a reduction in taxes would lead to a greater increase in revenue because it would stimulate the economy.” ‘
Therefore, the purpose of IMF policies is not to stabilize the economies of these countries in any way. Policies based on capitalist ideas are designed to leave the country’s economy permanently at the mercy of foreign companies and aid. Because IMF’s policies relate to the value of money, investments, budgeting, and taxes, no part of the country’s economy is immune to them. Being is not the only solution to the problem. The only solution to this problem is to get rid of this capitalist economic system