Pakistan has, for the time being, distanced itself from the IMF programme, citing unfavourable terms which the deal dictates. At the same time it will engage later this month in Article IV consultations with a view to getting back on an IMF programme. The underlying assumption that the IMF will relax its conditions for the new loan is an unwise one and it is difficult to give credit to the government for this. The original programme, which has just been cancelled, was for $11.3 billion but $3.7 billion were left undisbursed. This was not so much because Pakistan no longer needed the loan but because Pakistan was no longer fulfilling the conditions tied to the loan. That led to the IMF blocking the release of funds last year, despite repeated Pakistani attempts to meet those conditions and its inability to do so. Pakistan will have to accede to them if it wishes to continue to abide by the Washington Consensus, as the World Bank and the Asian Development Bank both require a Letter of Comfort from the IMF for further lending to Pakistan. This will only be issued if the Article IV consultations, which will take place in Dubai, are successful. The IMF-issued Letter of Comfort thus acts as a lever over the Pakistani economy, which will allow it to dictate policy as before, but without having to disburse any further loans. The only time Pakistan came successfully off an IMF programme was when Shaukat Aziz was Finance Minister in Gen Pervez Musharrafs government. While Pakistan was then free of political differences with the USA, that is no longer the case. The IMF can be very accommodating for countries that obey the USAs demands, but it imposes stringent conditions when it is being used as a tool by the USA to impose its will. The Washington Consensus is ideally placed to provide the USA with a tool to impose its will. It is because of this that IMF conditions have been so unfriendly. Pakistanis need look no further than the IMF wish list which it says made it hold the tranches it should have lent. It requires power sector reforms (in short, a further tariff hike), as well as a VAT, both of which are highly inflationary. The government must not only resist any measures which place further burden on an already overwhelmed common man, but must break off any alliances against national interests. If there is any need for funds, it should look to traditional allies rather than the burdensome Washington Consensus.