The government after wasting precious time, creating uncertainty, losing investor's confidence and allowing flight of capital has still not woken up and has only requested discussions on a loan. It is unnecessarily prolonging the inevitable misery. IMF is willing to provide funding on 5 to 6 percent. However, the last agreement with IMF can improve our understanding of its conditionalities and remove misconceptions. On November 22, 2001 Shaukat Aziz and Ishrat Hussain requested SDR 1,033.7 million (100 percent of quota) for a three-year arrangement under the Poverty Reduction and Growth Facility (PRGF) carrying an annual interest rate of 0.5 percent, payable over 10 years with a 51/2-year grace period. The need arose as the external financial situation had become fragile because of large debt service payments, increased capital outflows and loose macroeconomic policies. The details of the government's programme for 2001-2004 were set out in the Memorandum on Economic and Financial Policies (MEFP) and the Interim Poverty Reduction Strategy Paper (I-PRSP). The PRSP detailed the overall sectoral policy and strategic directions while the MEFP provided the targets for December 2001 to June 2002. The Technical Memorandum of Understanding (TMU) provided for monitoring the programme through structural performance criteria, structural benchmarks and prior actions. The Structural Performance Criteria required that no new exemptions regarding income tax, custom duties, or GST were to be granted, no new regulatory import duties were to be imposed and all time bound exemptions and regulatory import duties were to lapse. Government was required to apply standard GST penalty regime to retailers, eliminate GST exemptions for fertiliser, phase out the GST subsidy on electricity and GST exemptions for edible oil, vegetable ghee, and pharmaceuticals (except lifesaving drugs). Implementation of universal self-assessment scheme and Large Taxpayer Unit was to be started. The conditions required implementation of income tax reform package effective for income earned from July 1, 2002 including elimination of at least two minor withholding taxes, elimination of at least 55 income tax rebates, concessions, non-standard exemptions from the CRITO-list, lowering the threshold on NSS schemes subject to withholding tax on interest income from PRs 300,000 to PRs 150,000, bringing KESC to point of sale and allowing banks to purchase from August 1, 2002 foreign exchange from money changers at freely negotiated rates. The Structural Benchmarks required the government to prepare a list of intermediate I-PRSP indicators. Rules and regulations relating to universal self-assessment scheme for income tax were to be published. Revised income and sales tax appeals and dispute resolution process were to be implemented from FY 2002-03. A foreign exchange manual was to be issued and a pension reform package was to be prepared in collaboration with the World Bank. Under the Prior Actions the government was required to approve CBR reforms, publish first I-PRSP progress report and ensure SBP reserves reach US$1,850 million by November 15, 2001. CBR revenue for July-October 2001 was to reach PRs 109 billion. The government was to issue (a) circular clarifying that unlimited access to foreign exchange on the interbank market for all current transactions, beyond the current bonafide limits, will be granted on the basis of appropriate documentation; and (b) directive lifting the commercial backing requirement on interbank foreign exchange transactions with effect from November 25, 2001. On December 1, 2004 on completion of the ninth and final review Pakistan due to adequate reserves did not draw the final tranche or seek continuation. In conclusion spending beyond ones means as reflected in the trade and current account deficit is a sure recipe for disaster. The 2001 programme did provide a breathing space but the reforms could not be sustained later. There is no hidden IMF agenda as conditionalities are mutually agreed and documentation is on website. Actually, IMF bears the brunt as the political leadership avoids taking the bitter pill. The IMF proposals in its Economic Assessment Letter to the ADB dated August 28, 2008 are already being implemented. These are similar to the 2001 prescription and always harsh. Moreover, it is of concern that the IMF, WB and ADB's annual reviews of the economy failed to highlight the impending crisis. The government's economic team must be blamed for making President Zardari go all over the world on a wild goose chase begging for money. The government must conclude the IMF agreement immediately to restore confidence and open the doors for donors who had asked to "come through the IMF." The Parliament must scrutinise the upcoming IMF programme to avoid past mistakes and ensure ownership. Unfortunately, the political parties and parliamentarians have no interest or capability for such work and thus always remain subservient to the bureaucracy. The writer is a former member of the National Reconstruction Bureau E-mail: