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Introduction
Pakistan witnessed immense financial difficulties since its independence and after only one decade of independent functioning, it had to go to International Monetary Fund (IMF) for a ‘Standby Agreement' to address its balance of payment problems in 19581. Pakistan has negotiated 22 arrangements with IMF to fend off its financial difficulties. Each incumbent government rushes to IMF for a bailout arrangement and the current government of Pakistan is no different. After forming government in 2018, Imran Khan's administration had to negotiate another bailout package to address its problem of fast depleting foreign reserves. An agreement between Government of Pakistan (GoP) and IMF has reached and Pakistan would receive an assistance of $6 billion for a period of three years2. But this IMF bailout has severe conditionality, which is being implemented by the GoP.
These conditionality has resulted in devaluation of local currency, increase in inflation, fuel and electricity prices hikes, stringent taxation and economic uncertainty3.
Bailout packages of IMF never rule out financial woes of Pakistan, rather such arrangements escalate financial woes of poor in the country. IMF packages comes with certain conditions aiming at improving self-reliance of the country. These conditions include devaluation of local currency, increase in taxes, reduction in subsidies, privatization of state owned enterprises, and interest rate hike. There are no long lasting impacts of these structural reforms as Pakistan has to negotiate a new bailout package every few years. The current IMF package are also deemed hollow as associated conditionality are not aimed at solving Pakistan's problems4. It has further been noted that IMF bailout packages are becoming larger and longer over the time 5. Moody's Investor Service have indicated towards lower global competitiveness, weaker debt affordability, and higher external vulnerability of Pakistan6.
Although IMF saves a country from immediate default, but policies of IMF are designed make countries dependent on IMF and conditions of IMF are hard hit for poor population of a country7.
Another view argued that these negative implications of IMF are short run in nature and once a country achieves fiscal discipline, IMF programs yield positive outcomes for the economy8. Specifically, these programs are deemed beneficial for lower income countries witnessing external shocks or macroeconomic imbalances9. There is also evidence that strict IMF conditionality improves...