Understanding IMF

Plan ‘B’ or ‘C’, the thing is that reluctantly Pakistan has had to turn to IMF again. Former governments from 1999 to-date, all have had to clutch IMF lifelines when they assumed office. Some earlier governments failed to abide by the agreed programmes with it and as a result encountered serious economic repercussions and more recently the Musharraf government tightened the belt in the early part of its tenure, but was quick to ditch the IMF amidst a lot of fanfare once the post-9/11 cash inflows began to gush and the economy started to grow at an annual rate of 6.5 percent.
The present government after failing to tap nearly all possible alternatives - Friends of Pakistan, World Bank, Asian Development Bank, Islamic Development Bank, bilateral cash aid from a friendly country, etc. - has in the end had to resort to the IMF to bail it out from a situation of near default on its international commitments.
Given the past history of the IMF and specifically its relations with Pakistan, the government is rather defensive when it comes to explaining to the public as to why an IMF programme was unavoidable, the general perception being that while IMF may help the government remain solvent it represents a Shylock-like institution that is totally oblivious of the real interests of Pakistan and its people.
Not just Pakistanis but also the world has been a bit weary of the IMF and that is why we saw it to be conspicuously absent from the global lending scene over the past few years. In fact, not till very late in the present financial crisis (as late as mid-October 2008) it became engaged in rescuing the countries struggling financially. Only when one country after another had descended into the crisis was this economic firefighter of the world called upon. All said and done the IMF still remains the institution most suited to dealing with such crises.