Rulers ready to entangle Naya Pakistan into old debt trap: Altaf Shakoor.

KARACHI -- Pasban Democratic Party President Altaf Shakoor has said that the rulers are ready to entrap 'Naya Pakistan' in old snare of debt. Addressing a crowded press conference at the Karachi Press Club (KPC) here Wednesday that the rulers from the day one were ready to burden Pakistan with more foreign loans and they just befooled the nation that they had more option than to extend their begging bowl to the door of International Monetary Fund (IMF). Renowned economist and Dean of Institute of Business Management (IoBM) Dr Shahida Wizarat said if the rulers show sincerity with the nation and country there are really some alternatives to the IMF loans. She said our rulers are making same mistake over and over again to seek IMF loans, adding no country in the world has ever got economic freedom with the IMF recipe. Quoting Einstein she said: 'The definition of insanity is doing the same thing over and over again, but expecting different results.'

She reminded that the rate of growth of Pakistan's economy was quite impressive prior to 1990, but it declined thereafter. Borrowings from the IMF causing massive increase in debt and the conditionalities gave rise to the most serious growth crisis Pakistan has ever faced. This was reflected by a stagnating economy, de-industrialization, closing down of more than 5000 industrial units, massive unemployment, decline in real wages, increase in hunger and poverty. Dr Wizarat said there was hardly any development after getting the IMF loans that is why the 1990s is known as the lost decade. She said the growth and development crises gave effect to a distributional crisis. The rich got richer and the poor got poorer. According to an ADB estimate, of the total population living in the cities 50 % were living below the poverty line, whereas in rural Sindh the percentage was as high as 85%. She said the economic crisis led to increase in crime, robberies, suicides and murders. This was followed by political polarization and instability in the country resulting in downfalls of governments. She said the standard IMF policy prescription for countries faced with balance of payment crisis is to devalue the currency which through reduction in export prices is expected to expand the demand for exports. By: making imports more expensive the demand for imports is expected to be reduced.

This narrative does not take low elasticity of demand and supply of exports and imports into cognizance. She said with low demand...