The deal enhances the IMF’s economic and also political footprint, but leaves civil-military relations untouched and widens the gap between the elites and the masses
Before the IMF board gave its approval, IMF representatives met officials of both the Pakistan People’s Party and Imran Khan’s Pakistan Tehreek-i-Insaf (PTI) – the latter party still beaten and bruised after a confrontation with the ruling government and the military, which Khan has accused of pushing him out of power. It was reported that the IMF team met these parties to seek assurances of support for the approved programme.
While the IMF is interested in managing Pakistan’s economy, it is also very interested in managing Pakistan’s politics in order to ensure that its suggested reforms have political purchase and longevity.
Many in Pakistan see these meetings as unprecedented. But given the country’s political polarisation and how it has exacerbated the economic situation, the IMF seems to have taken precautionary measures. Its trepidation was also intensified by the fact that an earlier IMF reform programme was abandoned by the previous government, under Khan – in order, some say, to create a difficult economic situation for the incoming government. The IMF is obviously keen to avoid a repeat.
To vote or not to vote
The most immediate bone of political contention is the incumbent government’s decision not to hold elections for the provincial assemblies in Punjab and Khyber Pakhtunkhwa. Khan had dissolved the assemblies earlier this year, when his party controlled both of them, as part of a plan to force Islamabad into bringing forward the general elections, confident that the PTI would dominate the polls. But the incumbent government, fully supported by Pakistan’s powerful military establishment against Khan, decided to defy him.
Frustration over this, in addition to Khan’s arrest on corruption charges, spurred the violence on 9 May, when PTI supporters paralysed various cities and targeted numerous military establishments. But, PTI leaders told me, the outburst was also fuelled by fear that the government could postpone the general elections beyond the end of the year. The systematic targeting of PTI officials and workers that followed, and which decimated the party through imprisonments and defections, has only sharpened that fear.
To prevent any delay, Khan reportedly discussed elections with the IMF team when it went to meet him. Although the government has denied that the IMF discussed politics with any party, according to a PTI leader it is “more than a coincidence” that right after the IMF board’s approval the prime minister announced an intention to dissolve the government and hand power over to an election-time caretaker administration, paving the way for voting in November.
The military’s deep economic footprint, too sensitive to touch even for the IMF, means a perpetuation of the civil-military imbalance in Pakistan.
“The government had no other option,” a PTI leader who wished to remain anonymous said, “because the fund decided to release only a fraction of the total bailout package and kept the rest of the money, which it will probably release to the next government after the elections.”
The price of power
The IMF’s successful quest for political guarantees from all parties means that Pakistan’s economy will operate under the direct supervision of the organisation for a long time to come. This is a difficult situation for all the parties insofar as no party – unless it can afford to risk even tougher economic conditions, and the public wrath that they would bring – can hope to engineer the economy in ways that offer political benefits. Most parties in power seek to reduce fuel and electricity prices to create a semblance of economic stability and an artificial image of their good performance. The assurances given to the IMF should now prevent such adventures. This is already a manifestation of the IMF’s growing political – and, of course, economic – footprint in Pakistan.
Jets of the Pakistan military on display. The IMF’s reforms leave the military’s outsize budget and economic footprint untouched, perpetuating the country’s civil–military power imbalance. Photo: IMAGO / XinhuaApparently, the country’s political elites, including the military establishment, are not entirely unhappy with the situation. There are crucial reasons for this. First, as far as the military establishment is concerned, none of the IMF-suggested reforms target Pakistan’s bloated defence budget. Second, none of the reforms target the military’s deep involvement in the economy. In fact, the military’s economic involvement is set to increase, as the Lahore High Court has allowed it to manage thousands of acres of agricultural land. The military’s deep economic footprint, too sensitive to touch even for the IMF, means a perpetuation of the civil-military imbalance in Pakistan.
The IMF is directly reinforcing what can best be described as an “elite capture” of the Pakistan state.
Most importantly, none of the political parties the IMF met have pushed for reforms on these fronts either. The absence of any pressure for such reforms is tied to Pakistan’s broader political economy, which first and foremost benefits the entire political class, including the military. As pointed out in a 2021 report from the United Nations Development Programme, the Pakistan state provides various massive subsidies and concessions to elite groups, including the military and numerous business and landed elites present inside political parties and the national and provincial legislatures. By the UNDP’s count, these add up to a whopping USD 17.4 billion annually.
Without acting against this system, the IMF is directly reinforcing what can best be described as an “elite capture” of the Pakistan state. This then transfers the bulk of the economic burden from the austerity-driven IMF reforms to the masses, particularly via increased fuel and electricity prices.
Politically, this shields the entire political class, which means it will happily continue to play second fiddle to the IMF in both domestic and foreign policy. It also means a growing distance between the elite and the masses, and these masses’ increasing inability to influence policy-making via elections or otherwise. Any political party that comes to power will now not follow its own manifesto or the public mandate – it is expected to follow the policies of the IMF.
Could there be a better illustration of the ways neo-imperial relations work in today’s globalised world? On the one hand, the IMF is able to dictate the exact reforms Pakistan is, or is not, to undertake. On the other, it is also able to give Pakistan’s entrenched, unequal political structure greater permanence, with non-elected institutions continuing to play huge political and economic roles, and elected institutions unable – and unwilling – to bring about any meaningful change. The IMF has joined in making public politics in Pakistan a merely symbolic phenomenon, one in which the masses have no substantial role to play.
Disclaimer: Pakistan’s IMF bailout is not without political consequences - Views expressed by writers in this section are their own and do not necessarily reflect Latheefarook.com point-of-view