Pakistan Caught In Love-Hate Relation With IMF

New Delhi: Pakistan appears to be caught in a love-hate relationship with the IMF. Although the crisis-ridden country is surviving through periodic transfusions of IMF funds, ironically, the multilateral institution is coming under heavy criticism in its media.

While the Government desperately seeks loans as a lifeline to save the struggling economy, there are former ministers who blame the IMF for the country’s economic woes.

An article in The News International said: “Pakistan’s long engagement with the IMF has produced a pattern of systematic destruction: in the name of stabilisation, fiscal consolidation and ‘reform’, Pakistan has been subjected to a policy mix that has dramatically raised energy costs, imposed highly regressive taxation, throttled industrial production, increased poverty and pushed the economy towards de-industrialisation.”

The article states that the strategy for Pakistan’s socio-economic development should have centred on strengthening education, science, technology, and innovation, enabling the country to move from a low-value, natural-resource-based economy to a high-value-added, technology-driven knowledge economy.

However, it claims that the “exact opposite has happened, which now poses a huge existential threat: our schools, colleges and universities lie in tatters, our exports have declined to about $30 billion after touching $35 billion, the poverty has increased substantially, and there has been a mass migration of talented youth and industrial groups to greener pastures abroad”.

The article further stated that in the past five years, Pakistan’s industrial landscape has experienced a dramatic contraction, with hundreds of local manufacturing units shutting down as a direct result of rising energy costs, heavy tax burdens, and pervasive policy uncertainty. Business leaders have claimed that more than 50 per cent of factories in major industrial zones have closed.

Regional data shows similar trends at the provincial level: in Khyber Pakhtunkhwa alone, about 795 industrial units are said to have closed in roughly six years, a significant proportion of which have ceased operations in the last half-decade due to unaffordable utility costs and waning investment confidence. The textile sector, Pakistan’s traditional export engine, has been particularly devastated: industry sources estimate that at least 144 textile mills have shut down nationwide, while broader garment-sector closures have led to tens of thousands of jobs lost and declining export competitiveness.

The wave of corporate exits from Pakistan includes global names such as Microsoft, which is completely shutting down its Pakistan operations after 25 years, and companies including Careem, Shell, Telenor, Procter & Gamble and others that are either exiting or scaling back their presence amid currency volatility, inflationary pressures, and regulatory uncertainty. These departures signal a deteriorating investment climate in which both foreign and local enterprises find it increasingly difficult to plan long-term, secure capital and compete with regional rivals that benefit from more predictable policies and cost-competitive inputs, the article added.

(IANS)