Monday May 13, 2019
ISLAMABAD/KARACHI: Opposition parties cried foul as the federal government and the International Monetary Fund (IMF) reached a new agreement securing a $6 billion bailout for the cash-strapped country, following months of negotiations between the two sides.
Pakistan Muslim League-Nawaz and Pakistan Peoples Party leaders slammed the bailout agreement, voicing concerns over an almost certain possibility of higher inflation and slowed economic growth in the coming months as the country implements the loan conditions imposed by the global lender.
Reacting to the agreement, PML-N spokesperson Marriyum Aurangzeb said it was better for Prime Minister Imran Khan "to have committed suicide [making good on his promise] than to have agreed to the $6 billion deal" with the IMF.
Taking to Twitter, Aurangzeb addressed the premier directly. "Imran sahab, your incompetence and ineptitude have made the country a collateral for the IMF. You have handed over the country to the IMF for only $6 billion.
"Pakistan's deal with the IMF is now successful and an 'inflation bomb' has been dropped on the people [of Pakistan]. All the relief for the poor has ended and the prices of gas, electricity, and food items are up," she wrote.
Vehemently opposing the new deal, she mentioned positive changes for the country made by former prime minister Nawaz Sharif, who, she said, "brought into the country Rs60 billion worth of development projects and stabilised the economy".
Aurangzeb further talked about the new conditions put forth by the IMF, according to which, "there will be inflation in the country, an increase in poverty, and a scary rise in unemployment.
"Additional taxes worth Rs1,000bn will be levied and the [Pakistani] rupee will depreciate further."
Miftah Ismail, who served as Federal Minister of Finance, Revenue and Economic Affairs under the previous government, shared his concern over the implications of the loan agreement in a series of tweets.
PPP Senator Sherry Rehman posted, "The journey from #TabdeeliSarkar to #GhulamiSarkar is now complete. Other Govts ran IMF programs but nothing like the creeping coup of the economy that’s been happening since new Govt came in. “We will hang ourselves but never go to the IMF” ringing in all our ears..."
The agreement marks Pakistan´s 22nd bailout with the IMF, as the country struggles to stave off a looming balance-of-payments crisis while its economy teeters due to low growth, soaring inflation, and mounting debt.
"The programme aims to support the authorities´ strategy for stronger and more balanced growth by reducing domestic and external imbalances, improving the business environment, strengthening institutions, increasing transparency, and protecting social spending," said Ramirez Rigo, head of the IMF delegation, in a statement released late Sunday.
According to Pakistan´s finance adviser Abdul Hafeez Sheikh, the country is set to receive $6 billion from the IMF in addition to $2 to $3 billion from the World Bank and Asian Development Bank over the next three years.
"We have a $12 billion gap in our annual payments and we don´t have the capacity to pay them," Sheik said in a televised address as he announced the new agreement with the fund.