Plan 'B' or 'C', the thing is that reluctantly Pakistan has had to turn to IMF again. Former governments from 1999 to-date, all have had to clutch IMF lifelines when they assumed office. Some earlier governments failed to abide by the agreed programmes with it and as a result encountered serious economic repercussions and more recently the Musharraf government tightened the belt in the early part of its tenure, but was quick to ditch the IMF amidst a lot of fanfare once the post-9/11 cash inflows began to gush and the economy started to grow at an annual rate of 6.5 percent. The present government after failing to tap nearly all possible alternatives - Friends of Pakistan, World Bank, Asian Development Bank, Islamic Development Bank, bilateral cash aid from a friendly country, etc. - has in the end had to resort to the IMF to bail it out from a situation of near default on its international commitments. Given the past history of the IMF and specifically its relations with Pakistan, the government is rather defensive when it comes to explaining to the public as to why an IMF programme was unavoidable, the general perception being that while IMF may help the government remain solvent it represents a Shylock-like institution that is totally oblivious of the real interests of Pakistan and its people. Not just Pakistanis but also the world has been a bit weary of the IMF and that is why we saw it to be conspicuously absent from the global lending scene over the past few years. In fact, not till very late in the present financial crisis (as late as mid-October 2008) it became engaged in rescuing the countries struggling financially. Only when one country after another had descended into the crisis was this economic firefighter of the world called upon. All said and done the IMF still remains the institution most suited to dealing with such crises. It has $255 billion in uncommitted usable resources and the ability to elicit funds from countries that may be reluctant to act on their own - as with the Japanese and Nordic contributions to the Iceland package. Also the IMF route is perhaps better for troubled countries than their making ad hoc approaches to others. For example, Pakistan first sought an emergency infusion of between $2 and $4 billion from the Chinese government, and Iceland tried to work out a deal with Russia to soon realize that it is ultimately the IMF they will have to resort to. On its part the IMF management has of late become conscious of the stigma associated with its bailout and has worked hard to genuinely change and market itself as a more humane, modern and sensitive agency. This new look IMF has allocated $100 billion out of its total funds to undertake a new kind of loan to countries that are battered by financial crisis, making available in a sense new cash to help ease the world credit crisis. This new type of three-month loans, aimed at economies the IMF judges to be troubled but basically sound, would not require countries to make the often severe changes in their policies that the IMF has demanded for decades. Such a facility makes it potentially easier for crisis-hammered countries such as Mexico, Brazil and South Korea to shore up their cash reserves, currency and their ability to help the ailing companies as shaken foreign investors withdraw. However, the countries, which do not have their own house in order, shun the IMF because of the strings attached to the loans that often force big budget cuts or interest-rate increases. While in IMF view these conditions are designed to help governments save money and pay for necessary imports, the reality is that they also often deepen an economic downturn, making the IMF deeply unpopular in these countries. With this new facility, the IMF is essentially dividing developing countries into an A-list of nations that qualify for loans without strings, and a B-list for everyone else. Although it officially refuses to disclose the member names of its A and B lists, it does not take an Einstein to figure out which category Pakistan falls into. IMF is funded by contributions from its members and its large holding of gold, among other sources. Sometimes, it may not have enough to meet the needs of numerous applicants for assistance, but importantly its funding can often unlock other lending options for the country receiving its loan and this is how we should also be viewing our new relationship with this institution. The criticism of IMF by now is all too obvious: that it has in the past pushed countries into deeper financial crisis instead of helping them (Far Eastern countries in 1997-98), unreasonable IMF demands and interference can sometimes result in deep public resentment and even revolt (Indonesia under Suharto) and that its programmes often tend to increase unemployment and worsen poverty. This time around the IMF is trying hard to present itself as a helping hand rather than a blood sucker and in doing so it plans to streamline the approvals in such a way that they are quick, discreet and kept quiet, in order to induce the troubled countries to participate. For the Pakistani public to expect anything more from an institution, which is basically a lender and banks on taking aboard risky clients by dictating them fiscal prudence to secure its loans, would be foolhardy. The real challenge for our economic managers would be to use this unavoidable IMF borrowing in a way that they keep their cash dependency on IMF at the barest minimum and use this opportunity in a meaningful way to help unlock other better and borrower friendly credit options.