The condition of Pakistan's economy is not good and is on the verge of destruction due to many reasons but the main cause behind this situation is the repeated pursuit of International Monetary Funds for loans.
Pakistan has gone to the IMF 22 times in 60 years but we have not seen any significant improvement in the economical conditions. The people and former finance ministers of Pakistan blame IMF but in reality, their politicians, finance teams, economical policies, and military establishment are the real culprits for this condition of Pakistan's economy.
IMF programs are for economic sustainability and balanced growth.IMF also implements strict rules and regulations when giving loans which creates high inflation in the country and the country has to return loans back with huge interest rates. Pakistan's finance minister believes that they need to come out of the IMF program by extending local solutions, increasing GDP, and making the tax collection system better.
Politicians argued that without the IMF program or support Pakistan's economy will be ruined because the country has very few foreign reserves and money to fund profitable subsidies and the country will default shortly that’s why we need the IMF program but there finance experts insist that we can strengthen our economy without IMF by making changing our weak taxation system into a better system and achieve targeted tax collection every year.
A shallow and incompetent taxation system leads us to the financial crisis and ultimately to another IMF program. They can increase their foreign reserves without IMF support by increasing their exports and decreasing the number of imports. They have to do financial reforms and improve governance to assist the business investors which will increase its exports and help them to get more foreign reserves. The government of Pakistan has taken a good initiative to decrease imports by putting banned on imported luxury items.
GDP is a critical and huge factor in the economy of the country and plays an important role in the strengthening of the economy. Pakistan's economy falls substantially behind that of other modern economies. For example, Bangladesh's GDP growth rate is approximately 7%, but the GDP growth rate of Pakistan is around 1.3 percent. So, even in terms of growth rate, the economy is weak.
Secondly, they don’t utilize their capital resources wisely. The government of Pakistan is investing capital in the useless and nonprofitable sectors instead of spending on social development and small businesses to protect the most vulnerable and get profits.
Thirdly, their financial teams don’t take difficult decisions on time due to the fear of public reaction which caused irreparable damage to Pakistan’s economy. They have to take difficult and critical financial decisions timely and utilize their capital in a better way to boom their economy and become stable to come out of the IMF program.
If Pakistan has to come out of the IMF program, they need to come up with local solutions through local research that can successfully handle its difficulties so that its future is not destined for IMF plans. All the solutions will be fruitless unless there is a will on behalf of rulers to grow, extract the resources efficiently and use them wisely.
The general public in Pakistan understands that IMF packages typically include increased elective stabilization measures such as tariff increases, tax increases, fiscal reductions, and so on. The Program attempted to do this by eliminating exemptions and privileges, as well as increasing spending on good social and productive items in close conjunction with privacy. This is the IMF's approach to ensuring sustainability and avoiding the boom-bust cycle that Pakistan has been suffering for decades.
It would be a great success for Pakistan's economy and Pakistan's government if they come out of the IMF program and are able to stand on their feet then its economy will progress quickly and work efficiently and will not take so many days to convert into a strong economy from a weak economy
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