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ISLAMABAD — The Standby Agreement (SBA) programme by the International Monetary Fund (IMF) with Pakistan came as a lifesaving bailout, rescuing the cash-strapped country from an eminent economic meltdown.
While the strict terms and conditions by the IMF are being complied through difficult decisions by the caretaker government, which has been increasing prices of petroleum products, electricity and gas tariffs every fortnight, directly affecting the levels of inflation in the country and having damaging effects on lives of the locals, the broader intent is streamline domestic and external imbalances through policy anchoring.
The inflation projections during September in Pakistan have been estimated to reach 31 per cent, making the country’s inflation rate the highest in Asia.
[bsa_pro_ad_space id=1]This means that the direct effect of inflation through rising electricity and fuel prices in Pakistan, which is being done in compliance with the IMF programme, will further pressure and burden the lives of the masses, who are already suffering to the rising inflation, price hikes, meager or no opportunities for business, joblessness and zero opportunity of earnings.
The government is under serious criticism for not worrying about the miseries of its people, which they say become even more challenging after every 15 days of every month when government announces more increase in prices of fuel, electricity and gas tariffs.
On the other hand, the government maintains that it is bound by the strict requirements of the IMF bailout programme and has no other option but to take unpopular and tough decisions.
IMF maintains that the bailout programme is aimed at giving a temporary cushion for Pakistan to anchor its policies and use the time to formulate a secure financial framework to deal with domestic and external imbalances.
“The programme was approved in 12 July 2023. It is a ninth-month standby arrangement for an amount of $3 billion to support the authority’s Economic Stabilization programme.
The objective of the programme is to provide a policy anchor for addressing domestic and external imbalances and a framework for financial support from other donors, and multilateral and bilateral partners, including fresh financing and rollovers of debt coming due,”said Julie Kozak, spokesperson of the IMF.
“All of these reforms are ultimately aimed at paving the way for higher, more inclusive, and more resilient growth,” she added.
The IMF spokesperson’s statement clarifies that the IMF bailout was never intended to provide relief to the masses in Pakistan but was to create pathways to sustained growth for the country in the longer run.
But it is a fact that the government’s compliance with the IMF programme has resulted in forcing millions of Pakistanis below the poverty line. A recent report stated that about 95 million Pakistanis have fallen before the poverty line due to the rising inflation in the country.
While the government foresees the rise in inflation and energy prices to further intensify in the coming days, locals in the country, who have been protesting against price hikes, say that they have no clue on how to feed their families and survive.
“There are days when my children and I go to sleep without anything in our stomach except water and maybe one piece of bread,” said Irshad Bibi, a local resident in Islamabad, who walks around six miles from her house in the suburbs to the city with hopes of finding work daily.
“They (government) want us to die by starvation. They want us to commit suicide. Frankly, this seems to be the only way out of this miserable life,” she added.
The story of Irshad Bibi can be related to millions in Pakistan, who are facing the consequences of the unprecedented economic crisis, which they say is because of the IMF Bailout programme.