Lahore School of Economics

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Why the IMF?

Dr. Rashid Amjad 

AS a champion of market fundamentalism and regaining and maintaining macroeconomic balance, however high the costs, there are very few people and even fewer economists who have a good word to say about the IMF.

Indeed, going for support to the IMF is a country’s worse economic nightmare as implementing its standard prescription of strong stabilisation measures, backed by tough economic reforms, inevitably results in economic misery for the poor and the newly emerging middle class. However, without its support and ‘letter of confidence’, many countries face the threat of default as programme lending from IFIs (World Bank, Asian Development Bank) is dependent on their green signal and without it global financial markets punish you with unaffordable high rates of interest.

Pakistan has been under a dozen IMF programmes over the last 30 years of which only two have been successfully completed. Both sides blame the other — the IMF that we have never followed through promised reforms and our economic policymakers that the cost is far too high and the benefits a distant mirage.

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posted by S A J Shirazi @ 1/02/2023 10:32:00 AM,

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