The Politics of IMF Programs in Pakistan: Sovereignty vs Economic Survival

Abstract

This study provides a critical analysis of the political and economic effects of the IMF programs on Pakistan, specifically focusing on the trade-off between economic sustainability and national sovereignty. This study will attempt to analyze the effect of different IMF programs on economic management and decision-making autonomy in Pakistan using different mechanisms such as fiscal discipline, tax reform, subsidies, and structural adjustment programs. This study relies on both qualitative and analytical techniques which use primary and secondary sources such as official reports by the IMF and others. From the findings, it can be seen that although IMF programs help in providing economic stability and saving Pakistan from financial bankruptcy, it continues its structural dependence and restricts economic independence. Other findings of this research include socio-economic repercussions of conditionalities placed by the IMF, which includes rise in inflation rate, decrease in welfare payments, and economic burden on the citizens of the country. Political economy and dependency approaches are used in the research to identify that structural dependence of Pakistan on loans provided by the IMF is an indication of the underlying structural issues of the governance and economy of Pakistan. According to the research, institutional reforms, lower foreign debts, and equilibrium between financial stability and sovereignty are required to ensure sustainable economic stability in Pakistan.