Pakistan is once again being dragged further into a debt trap. Once again, it is being said that the failure to maintain the balance of payments means Pakistan need IMF support. This was said by ADB country director Werner Liepach in an interview on Wednesday. He predicted that Pakistan would need $9 billion, which would represent a bigger package than the last one. IMF packages come with conditionalities which are difficult for weak political governments to fulfil while maintaining popular support. It is also worth noting that one report has it that the Finance Minister resigned over the insistence that Pakistan subscribe to a new IMF programme. It would perhaps make matters easier for the IMF, the ADB and other international institutions of the Washington Consensus, like the World Bank, in the next five years, if the incoming government could be bound to an IMF programme by its predecessors.

Another problem with asking for an IMF package, and one involving $9 billion, is that the money has to be repaid. Already, Pakistan is facing a burden in the repayment of previous IMF packages. Taking on more foreign debt when it is being pointed out that the federal deficit targets of the current fiscal year will not be met, does not seem wise. That points out the real solution, towards which the government and Washington Consensus both do not point, that the government is extravagant. If instead of corruption and extravagance, the government was to leave a legacy of saving the taxpayers’ money, it would perform a much-needed service for its successors. As it is, with the country being forced to rush, cap in hand, to the IMF, the legacy Government is leaving is extravagant. If instead of corruption and extravagance, the government was to leave a legacy of saving the taxpayers’ money, it would perform a much-needed service for its successors. The propensity is not just dubious, but leaves it little room to campaign in the current election, where it will have to face hard questions about its credentials as an economic manager, even if it does not ask for an IMF package.