IMF appreciates criticality of broader political consensus

ZAHEER ABBASI

ISLAMABAD: The International Monetary Fund (IMF) considers broader political consensus vital for successful and sustainable implementation of structural reforms in key areas of Pakistan’s economy to overcome the challenges.

Background interaction with officials also revealed that there is a change of IMF Resident Representative for Pakistan with Teresa Daban replacing Tokhir Mirzoeve in Islamabad. Overall perception in the IMF is the sooner a broader political consensus on economy is achieved, better it will be for the country; otherwise it does not matter how many bailout packages Pakistan get, the structural reforms in energy, tax compliance and privatization will not be sustainable.

They expressed disappointment and dismay that economic reforms process initiated during $6.64 billion three-year Extended Fund Facility (EFF) programme has either been stopped/slowed or reversed due to lack of political ownership soon after the programme concluded in 2016 and Pakistan appears back to 2013 position.

All this warrants a strong political consensus to separate economy from politics and the IMF and its approach can not be blamed for economic situation.

This is not for the first time rather it has been happening for the last 20 years and the puzzle every time has been how to initiate and do structural reforms in tax compliance, exchange rate and energy sector, the officials added.

Despite many IMF programmes, the core issues continue to remain unresolved in Pakistan primary because of lack of political ownership. Pakistan political leadership needs to separate economy from politics for economic betterment of the country.

They said that the question is not how strong or soft the IMF has been during all its programmes, the real question is how sincere political leadership had been in implementing or taking ownership for economic reforms.

They maintained that despite having a 17 percent share in the IMF, it is difficult for the US to influence the IMF as a member-based institution can not deny assistance on political grounds. The Board and Staff work has been separated to a large extent.

They added that the IMF has already pointed out that this fiscal year will be a difficult year for Pakistan in terms of balance of payment position. Thus IMF programme cannot be blamed for failure of sustainable economic reforms in key areas needed to put the country on a path towards sustainable growth. They added that the current fiscal year will be difficult for balance of payment position.