The IMF Board of Directors has acceded to Pakistans request for an extension of its programme, with the result that Pakistan, instead of completing the programme at this year-end, will now complete it on 30 September 2011. The extension is intended to let Pakistan meet certain IMF conditionalities, most notably the imposition of the RGST, which is presently stalled in the National Assembly, though promised as long ago as the 2010-11 budget. The programme, which was designed primarily to give Pakistan balance of payments support at a time when it was in difficulties, last saw the IMF releasing money to Pakistan in May. The plea that is used by the IMF for the RGST is the improvement of the tax:GDP ratio. If that is the case, why would the IMF want the imposition of a tax that would only cause inflation, while the Pakistani state left a major sector, that of agriculture, untaxed. The problem is that agricultural incomes appertain to those in the legislatures, on both sides of the political divide, and they use these positions to prevent any tax being levied on the incomes which enable them to live a life of leisure enlivened only by politics. At the same time, the IMFs wider agenda, that of ensuring that the USAs will is done, should not be lost sight of. As Pakistan is crucial to the USAs war on terror, it will not be allowed to collapse, no matter how serious are the misdeeds of its government. The charge of corruption will only be used as a stick to beat the government into obedience. The recent wholesale changes in the Finance Ministry team were designed to enable this extension to take place. An important component of the work of the IMF is to prevent the economies where it intervenes from coming off its aid. If economies like Pakistans were ever to be truly independent, one of the most telling arguments for the acceptance of American intervention, that its goodwill is crucial to the economy, would disappear, and thus pro-US forces would find little to help them continue the stranglehold in which it is held. Apart from other aspects, the timeframe is interesting. It allows the next budget to be seen, and it covers at least the beginning of the US drawdown of troops from Afghanistan. This means that the extension was not granted merely for economic reasons, but also because of the war on terror. Pakistans receipt of further money will depend on how enthusiastically it falls in with US plans. However, that will happen only if the government continues to act as a subservient agent to the USA. The government should not only break with the IMF, but it also must break with the USA.