As the Pakistani government implements brutal austerity measures dictated by the International Monetary Fund (IMF), US-dominated international lenders have pledged $1.1 billion from a previously agreed 2019 loan to Islamabad. It is pushing for even more drastic “reforms” before allowing access to its tranches.
While the country is on the brink of bankruptcy, its poor suffer from systemic hunger and hunger due to the effects of decades of austerity, last summer’s devastating climate change floods, and soaring prices. All indications are that the conspiratorial “negotiations” between the IMF and Islamabad are putting pressure on Pakistan to keep it away from China and to end its long-standing but recently strained partnership with US imperialism. pressure for a geopolitical realignment in the direction of reviving the
An IMF delegation visited Islamabad from 31 January to 9 February. However, IMF officials have called on the interim coalition government, led by the highly unpopular Shebaz and his Sharif, to raise electricity prices further and raise interest rates. These measures will exacerbate the devastating social crisis facing his 230 million people in the country.
According to IMF official Esther Perez Ruiz, Pakistan must also provide “strong and credible assurance that it has sufficient funds to ensure that (its) balance of payments is fully covered.” The IMF claims there is a $7 billion funding gap, while Islamabad claims the gap for the fiscal year ending in June is only $5 billion.
The IMF’s new demands come as it has imposed a virtual embargo on virtually all foreign financing options in Islamabad, including those from traditional Gulf allies such as Saudi Arabia and the United Arab Emirates. Islamabad was relieved of this Catch-22 situation for her when China loaned her $2 billion last week. The reasons for Beijing’s policy shift remain unclear, but Pakistan’s political leaders and opinion-makers welcomed it, quickly reiterating that China is the country’s “all-weather friend.” , indicated that an agreement between Islamabad and the IMF was essential to providing further financial support.
On February 28, global rating agency Moody’s downgraded Pakistan’s credit rating by two notches to ‘Caa3’. He cited the country’s “increasingly fragile liquidity and external standing” as an explanation. He added that Pakistan lacked the funds to pay for the three-week import.
The current impasse has nothing to do with Islamabad’s reluctance to impose ruthless austerity measures. The government of former Prime Minister Imran Khan was summarily sacked in April 2022 after he withdrew IMF-demanded subsidy cuts in the face of countrywide protests. Khan had previously implemented the toughest austerity measures in the country’s history twice. In the final years of his Khan administration, Khan shifted his country’s foreign policy toward a closer alliance with Russia and deepened ties with China, causing concern and anger in Washington.
Sharif’s Muslim League (PML-N) and the People’s Party (PPP) formed a coalition government with military approval. This party is the linchpin of the alliance between the Pakistani bourgeoisie and US imperialism and has long been the most powerful political actor in the country. The new government’s clear objective was to implement IMF austerity measures, and it has done so. As soon as I took office, I worked to mend relations with the United States. Khan initially accused the United States of involvement in his dismissal, but has since used this allegation as a means to win Washington’s favor, appease the military, and pave the way for a potential return to power. rejected as
Khan is trying to capitalize on popular opposition to disastrous IMF reforms, and Islamabad’s decades of reactionary partnership with US imperialism has led the country to ruin after ruin. . He cynically takes a stance against IMF austerity and US bullying and war. Meanwhile, the government seeks to embroil Khan in a politically motivated corruption scandal. With arrest warrants from court hearings pending, his supporters have rallyed in Lahore this week to call for early general elections. Armed police attacked Wednesday’s rally, killing at least one Khan supporter.
The ruling elites are increasingly concerned that political turmoil and social crises could spiral out of control, resulting in a rise in popularity such as last year’s rise in Sri Lanka that forced President Rajapakse into exile. , has generated massive opposition to its ruthless austerity policies.
The March 1st report of the widely read English-language daily breaking dawn He compared the current impasse with the IMF to “a situation similar to 1998” when Islamabad was sanctioned for conducting a nuclear weapons test, noting that “foreign capital is working for Pakistan’s ‘meltdown’.” Citing an unnamed official who made the allegations. “This time some forces had Pakistan’s missile program in mind,” said one official.
Officials quoted breaking dawn Named the countries mentioned. But the only real contender is the United States, which not only controls the IMF, but has a track record of using it ruthlessly to advance its geopolitical goals.
Pakistan continues to come under constant pressure from the United States for its increasingly close economic and defense partnership with Beijing. Washington has openly opposed the strategic $66 billion China-Pakistan Economic Corridor initiative, blaming it for Islamabad’s debt crisis. Washington’s determination to escalate the war against Russia in Ukraine goes hand in hand with its preparations for war against China, which US imperialism sees as its main strategic rival.
On March 2, the U.S. Department of Commerce’s Bureau of Industry and Security identified 14 Chinese and Pakistani “entities” for “contributions to ballistic missile programs of concern,” including Pakistan’s missile programs, and “contributions to unprotected nuclear activities.” Blacklisted for ‘involvement’. While this is not the first time such actions have been taken against Pakistani organizations, these measures have always been aimed at bullying Islamabad into aligning itself with Washington’s geopolitical agenda.
Prominent PPP leader Raza Rabbani, a close aide to the once assassinated former prime minister Benazir Bhutto and a longtime member of the Pakistani Senate, is being subjected to Islamabad at a joint session of parliament’s upper and lower houses in Sharif on Monday. I asked him to explain the “pressure”. House. Rabbani asked “Are our nuclear assets under pressure?” requested. [a] A role in the region to facilitate the military presence of imperialist powers. Rabbani also wanted to know why “friends are reluctant to support Islamabad”.
It is worth remembering that in June 2021, Prime Minister Khan, when questioned by an HBO Axios interviewer about the CIA presence in Pakistan, declared: Afghanistan. Absolutely not. ”
Another notable development was Pakistan’s statement last month denying reports it was supplying “defense items” to Ukraine. With its close Cold War alliance with Washington, Pakistan armed Islamist fighters against Soviet forces in Afghanistan and later, as an ally in the fraudulent “war on terror”, used US fighter jets, artillery, and other Armed with an army. Device. The Pakistani military maintains relations with Washington independently of the civilian government.
In addition to its arsenal of “tactical” nuclear weapons, Pakistan has developed an array of “strategic” nuclear weapons and nuclear-capable missile systems to compete with its geopolitical rival India.
Crisis in Pakistan’s bankrupt capitalist economy is nothing new. It is exacerbated by the ongoing damage from the global pandemic and inflationary pressures around the world resulting from the ongoing war in Ukraine. Despite contributing nothing to this crisis, the working and poor who make up the vast majority of Pakistan’s population are facing a social catastrophe of unprecedented scale.
The rupee climbed above 278 rupees before the country’s central bank, the National Bank of Pakistan (SBP), raised its trend-setting policy rate to 20%, an unprecedented 300 basis points hike in response to IMF demands. was falling. There has been some recovery since then, but further devaluation is likely as the IMF calls for “free movement” of the currency. For comparison, the Rupee in March 2022 was 179.5 per dollar.
Ahead of the rupee’s devaluation, the modest official inflation rate was 31.5%, the highest since 1975. Comparing the price to the same week last year, last week’s rate was 41.07%.
In addition to squeezing inflation, the brutal austerity program has imposed an unprecedented level of devastation caused by last summer’s floods, which inundated a third of the country and caused $30 billion in damage. It is A total of 30 million people were directly affected.
breaking dawn To quote Muhammad Khan, who is pushing a cart in Lahore’s industrial market, he barely makes enough to feed his family two meals a day. “For a family of six, he needs at least 20 rotis. [a round flatbread native to the Indian subcontinent] It costs a staggering 600 rupees twice a day [at a rate of 15 rupees each]… A basic family meal costs more than 1,000 rupees ($3.63) a day, but given my age and health, I cannot earn that kind of money every day,” he said.
Niaz Ahmed, a loom worker in Faisalabad, said, “Getting sick, especially a life-threatening illness, is almost a death sentence for the poor. [person] now. The report contrasted a monthly minimum wage of 25,000 rupees ($90.69) with unprecedented price hikes for all essentials, rising unemployment, and said, “Even ordinary medicine is out of reach for the middle class. ” he added.