Success of IMF program depends on home grown plan, not on following fund's recipe blindly.

Author:Kazmi, Shabbir
Position:International Monetary Fund
 
FREE EXCERPT

Byline: Shabbir Kazmi

At a recently held seminar at the Sustainable Development Policy Institute (SDPI), Teresa Daban Sanchez, Resident Representative, International Monetary Fund (IMF) to Pakistan said, "The Fund's program faces significant risk from a failure to build political consensus around its key components". Added to this is the threat of failure to get off the 'grey list' of the Financial Action Task Force (FATF) that could complicate access to private financing from global markets. She also insisted that Pakistan has to get out of the grey list. She minced no words and said that the biggest risk faced by Pakistan is political risk.

The Government of Pakistan (GoP) has committed to making amendments to the State Bank Act, Nepra Act, Anti-Money Laundering Act and the State-Owned Enterprise Act as part of the IMF program. However, the incumbent government right now faces a weaker position and making these amendments may not be an easy task. A ray of hope emerged after the recent survival of Chairman Senate, in a non-confidence move.

The situation demands better understanding of ruling regime with the opposition. It also demands the opposition to make a difference between 'political rivalry' and 'achieving the national objectives'. Sitting Prime Minister, Imran Khan was the biggest opponent of borrowing from IMF, but has to swallow this bitter pill. Coming under an IMF program does provide a temporary relief but better policies have to be developed and implemented to find the sustainable solutions.

Documenting Gold Import

One of the requirements of FATF is that gold trade in Pakistan should be documented to avoid its use for money laundering and terrorism financing. Analysts FATF is completely unaware of the dynamics of this trade in Pakistan. They say if the central bank does not provide foreign exchange for the import of gold, the demand has to be met through...

To continue reading

REQUEST YOUR TRIAL