The Role of IMF Conditionalities in Pakistan's Economic Well Being
The role of IMF Conditionalities in Pakistan's Economic well being was the topic of discussion at the Economic Society '97 Seminar. Dr. Arshad Zaman former Chief Economist & Planning Secretary to Government of Pakistan said that nothing was wrong with IMF prescriptions. They were necessary, but not sufficient. Basic problem was that nobody was incharge of economy. PPP or Muslim League is not the problem. According to him scheme of "NDRP" is entirely a marketing gimmick, if closely inspected it is the scheme of borrowing money not to retire debt.
He said, that the present government has extremely competent persons, but problems are much larger. There should be a task force headed by the Finance Minister consisting of very competent persons in government. Task force should be small who should work to put in place the mechanisms that should redeem the situation in maximum 4 months.
He said that we should stand still on excessive borrowing by government. If the government do not take corrective measures there is a risk of default. Task force should slow down the pace of excessive borrowing. In context of stand still, 4 things needs to be done. Pass an Economic recovery act. The principle feature of this economic recovery act should be to balance the budget after a transition period. This act needs high level of support, otherwise it can not be done.
Mr. Aftab Ahmed Khan reiterated that right from the 50s we have a "Khairati economy" he said that the conditionalities are meant to structure the political system of a country in a way perceived by the foreign masters. He said that after the breakdown of Bretton Woods System the betterment of the economy of the development countries that was meant to be original goal of IMF has lost its significance.
Now by extending the money to the third world IMF spell out in clear term the economic-cum-political structure that they require but he said that there is no use blaming them. The concept of economic sovereignty has little meaning in the present world order context. We should be more self dependent, more over some of the IMF's conditionalities are very good for the economy if pursued in good spirit and with a logical perspective. He was of the view that we have kept the productivity of the country very low in the scheme of priority. …