LAHORE - The International Monetary Fund (IMF) is likely to influence the economic policies and management in Pakistan but with more hard conditionalities this time around as the PPP-led government is going to accept the Stand-By Arrangement (SBA) programme in the next couple of weeks in a bid to overcome the balance of payment crisis. The economists, however, say that if Pakistan opts not to go to IMF, it would be considered a success of the PPP-led government. Though both the President and the Prime Minister, the other day, said that they would not accept the loan with hard conditionalities but it seemed that ultimately cash-strapped Pakistan would be left with no option other than to approach to IMF, analysts said. The government would have to increase further the energy prices, impose tax on agriculture income, reform tax administration, enhance the tax net, reduce defence budget, cut down the Public Sector Development Programme and abolish all kinds of subsidies in case the government deemed it fit to initiate IMF arrangement. In the past, the introduction of general sales tax, rationalisation and reduction of import duties, elimination of income tax exemptions, and reforms in tax administration persistently pursued since the 1980s were mostly IMF initiated measures. In fact, government had been slow and reluctant in implementing some of these measures (like agricultural income tax, reduction in subsidies, and-elimination of tax exemptions), which often led to breakdown in the arrangements. But this time, the IMF is forcing the government to implement these measures, no matter such steps are considered anti-public in the country. "The influence and involvement of the IMF and its allies, the World Bank and Asian Development Bank, has not been confined to economic and financial policies alone; it has systematically crept in social and other areas as well. Practically, all spheres of state policy and activity have come under its influence, be it fiscal, monetary, trade or payments; agriculture, industry or energy; education, health or social welfare; governance, civil administration or justice. The Fund has been imposing strict conditions involving economic, human and social costs," disclosed Fasih Uddin in his book 'Pakistan under IMF Shadow' published by the Institute of Policy Studies Islamabad. "Over the past six decades Pakistan's relations with the IMF have transformed from an ordinary member to that of a heavily dependent and 'prolonged user' of its resources." "Pakistan has been one of the 'prolonged users of the IMF resources; it remained under the IMF support arrangements for twenty-five years (almost continuously during 1988-2004). It is contended that, with this long association, the International Monetary Fund (IMF) has acquired a firm grip on the economic management of Pakistan; which often has caused more harm than good. Any attempt to deviate from the 'IMF-prescription', it is argued, has resulted in tightening the noose, causing more pain". "A step taken under IMF compulsion that constraint economic growth and social development was reduction in budget allocation for public sector development programmes (from over 7 % of GDP in the 1980s and early 1990s to less than 4% in later period) to meet fiscal deficit targets. This step, not only affected the development in key infrastructure and social sectors, but also depressed private sector progress. Notwithstanding its merits and demerits, the 'IMF set course is deeply engrained in the current policies and economic management of the country. The annual Article IV consultations provide a mechanism for the Fund to oversee Pakistan's performance and ensure that it remains within the framework, earlier agreed and supported by it. Various World Bank/Asian Development Bank - supported programmes and projects, currently executed in Pakistan (e.g. Financial Sector Reforms, Taxation Reforms, Power Sector Reforms and Public Expenditure Management) are also designed to promote the IMF set agenda. Preventing the situation of again relapsing to the IMF support arrangement would largely depend on Pakistan's ability to perform well in such areas as foreign exchange reserves, current account balance, fiscal deficit and public debt for which benchmarks are suggested in this section. The attainment of these benchmarks is dependent on various economic, non-economic and exogenous factors - the critical being well formulated-executed long term plans of economic and social development; improved governance, security, law and order situation; continuity, predictability and transparency in policies; political stability and promotion of democratic practices; and safeguards from external shocks like oil price hike and regional instabi1ity. The International Financial Institutions are actively supporting reforms and structural changes in some of these areas like judiciary, police, public administration, education, health and environment. With this deep involvement of IFIs in the state affairs, how is it possible to ensure independence of decision-making and national self-reliance?" questions the writer. Poor performance of the economy since 2008 with little prospect of immediate reversal, the possibility of going back to the IMF support arrangement cannot be ruled out. None-the-less, the surveillance of the economy under Article IV Consultations will ensure that Pakistan remains on the IMF set course. In all probability the IMF shadow is likely to persist on the horizon of Pakistan, Fasih Uddin predicted.