The IMF bailout

The International Monetary Fund (IMF) finally agreed to offer loan assistance worth US 7.6 billion, with the first tranche of US$3.1 billion to be available right now under the Stand-By Fund Facility to Pakistan to avert an immediate bankruptcy on its debt payments. The remaining tranches will become available in the next 23 months time. This is not the end of the story. The country, however, needs over US$13.4 billion to be on the track to payback its debts up to next June. Pakistan has to payback the loans after five years, starting from 2011 along with a very high 3.5-4.5 percent interest rate. The bailout announcement was made by Shaukat Tarin, Government Financial Adviser, on November 22, at a press conference in Karachi.
Once again the government in Pakistan could not find out any other way except going back to the IMF for obtaining funds to avert financial moratorium. This is not for the first time for the government to have contacted the international creditor to meet the chronic shortage of foreign funds. The government has a history of accepting the IMF loans on severe conditions irrespective how much damage was done with regard to policies and programmes including financial sovereignty. With more than ten interventions by the IMF only after 1988, programmes fell short because of the shortsightedness, mismanagement, misgovernance, and gross corruption on the part of the government managers and leaders. Who will assure that the eleventh intervention will not entrain any malpractice?