PAKISTAN-INTERNATIONAL MONETARY FUND: AID OR CHALLENGE TO ECONOMIC SOVEREIGNTY?

Pakistan has faced economic challenges in recent years amid rising global crude oil prices and hydrocarbon import bills: free fall of the rupee, high interest rates, elevated fiscal deficits, 37% inflation, falling stock market, and as a result - shrinking industrial production and elimination of social welfare spending. The borrowings from the IMF, China, and Gulf countries to restore foreign exchange reserves and lack of capability to return them convinced the military- civil authorities in 2023 to declare a threat to the country's economic sovereignty. The 2019 IMF financial assistance program approved the allocation of 6.5 billion USD until 2023. In 2023, the Fund approved an additional Stand- By Agreement in the amount of 3 billion USD. Basic requirements of the IMF included tightening of credit and financial policy; conducting reforms to improve budgetary discipline and broaden the tax base; reducing public debt; etc. The authorities took a number of urgent measures, first of all, they increased electricity tariffs and the amount of collected taxes. Pakistani society has been critical of the IMF's demands, especially the increases in electricity tariffs and cuts in social benefits, accusing the IMF of making Pakistan a victim of a debt trap, like many other developing countries. In 2020-2021, the five COVID-19 pandemic waves in Pakistan and then the devastating flood in the country made the situation even more complicated. Challenges in the economy were aggravated by the fierce internal struggle of political opponents. The economic reforms carried out by the three subsequent governments in 2018-2022, headed by prime ministers Imran Khan, Shehbaz Sharif, and Anwaar Haq Kakar, were inconsistent and contradictory, which provoked criticism on the part of the IMF.