The Pakistani government may claim victory over, finally, obtaining a loan from the IMF but if they had read the latest staff report on Pakistan they would not have been that jubilant. The report is a damning indictment of the Pakistani state.
In his latest column Khurram Hussain notes that he has read these reports every year for the last decade and he has just one remark: “I am struck by the feeling that I am reading the same document year after year after year. It’s a tale without a plot.”
As Hussain lays out in his column, Pakistan has been under IMF supervision since 2008. “Over these 15 years there have been four programs (the current Stand-by Arrangement included). Count the years and you’ll notice that out of these 15 years, it has spent 11 under Fund programs. Those years when it was not under a Fund programme it spent preparing to get onto one. In that sense, the past decade and a half has been one long (albeit discontinuous) IMF program.”
If we look at any sector of Pakistan’s economy the story has been the same, whether circular debt or anything else. “The reports feature the same problems being discussed over and over again all through the decade, while the problems under discussion grow in scale and spread outwards to draw other areas of the economy into their orbit.”
Hussain concludes with a warning “Pakistan is sinking increasingly into financial and economic unviability. The rest is details. Fact is, the country can no longer afford a modern state. It cannot even afford to operate its own economy, because doing so depletes the reserves or drives up the debt burden even higher. Somewhere, somebody has to wake up and realise that this path cannot continue. A clear decision-making centre has to emerge in the country, or these problems that are more than a decade and a half old will bury us all.”
