The mismanagement by Pakistan’s ruling elite has led to recurring political and economic crises, prompting 25 IMF programs that have exacerbated structural issues rather than fostering sustainable growth. The current IMF program endorses the government’s lavish spending while burdening ordinary citizens with adjustments, neglecting essential reforms. Since 2023, Pakistan has undergone significant fiscal adjustments under IMF guidance, primarily through revenue measures that disproportionately affect formal firms, employees, and the less affluent.
The government’s unchecked spending has surged, with public expenditure soaring by 60% and non-interest expenditure by 70%, largely driven by political patronage and development spending. Despite this, the IMF has turned a blind eye to these practices. The stringent tax policies, subsidy cuts, and currency devaluation have pushed over 114 million Pakistanis below the poverty line, with high unemployment rates and declining real wages exacerbating the situation.
The IMF’s program design has shifted the adjustment burden onto compliant firms and ordinary citizens, shielding the government’s extravagant spending. This approach, seemingly technocratic, is viewed as a politically motivated strategy rather than an oversight. The IMF’s role in approving fiscal frameworks and expenditures while allowing fiscal profligacy raises concerns about complicity and lack of oversight.
