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Imran Khan passes mini budget to appease IMF but angers citizens

Pakistan Prime Minister Imran Khan

Discontent has risen among the people in Pakistan as the Imran Khan government, which is looking for a financial assistance package from the International Monetary Fund (IMF), passed the Supplementary Finance Budget, increasing tax rates for many items. Already unemployment among the educated youth is increasing at a time when inflation in December touched 12.3 per cent, up from 11.5 per cent in November.  The “mini” budget now is likely to push up prices further in the immediate term.

Earlier, the Dawn in a report said that “much of the bitterness against the IMF comes from the conditions it attaches to its loans.” However, IMF loans come with stringent conditionalities that touch upon macroeconomic and structural policies.

The news organization noted that protests against the IMF have erupted in countries like Argentina, Ecuador, Egypt, Greece, Jordan, Kenya, Nigeria, Pakistan or Tunisia.

In fact, the debt-ridden Sri Lanka, despite having a total debt burden for this year is $6.9 billion, rejected IMF assistance.

Islamabad will resume negotiations with IMF next months for a $6 billion package.

While in 2019, IMF agreed for a bailout package, it halted assistance in January 2020, after Khan refused to increase electricity tariff and impose additional taxes as prescribed by the multilateral agency.

Also read: Pak Central Bank thumbs down PM Khan’s proposal–refuses to release funding for the Taliban Government

But now with the passage of the “mini” budget that aims to put an end to several exemptions, opposition members have said that the IMF will now have a role in deciding the country’s economic policies.“A country’s strategic autonomy gets compromised when multilateral agencies provide financial bailout packages..they tend to dictate terms and that is the reason many countries refuse to seek help from multilateral agencies,” an analyst said.

The News International said that the PTI government’s surrender-like agreement with the IMF has pushed Pakistan’s citizens into more misery.

“The agreement to the conditionalities of the IMF has been signed by the rulers in Islamabad, on behalf of Pakistani citizens. And they are being enforced with all the burdens of this agreement. The unbearable cost of food and basic needs for survival is being paid by citizens without knowing why,” the news organization said.