As Pakistan gets bailed out yet again by the International Monetary Fund, its relationship with the lender of last resort has become like that of a chain-smoker with his cigarettes: no sooner has one been smoked than another is lit from its glowing embers.
Thus, Pakistan’s new finance minister, Miftah Ismail, shuttled home from Washington DC in June to sell the latest $6 billion IMF rescue package to a weary public. Once signed, it will be Pakistan’s 24th support arrangement with the fund since 1959, superseding the 23rd arrangement, which is due to expire in October.
That is a record, albeit a dubious one. No other nation has sought the IMF’s support as often as Pakistan. Indeed, Pakistan’s economy was first rescued by the IMF in 1958 (just 11 years after its independence from British India). It has been in the fund’s intensive care unit for 36 of the subsequent 64 years.
The longest period that Pakistan was not under IMF supervision was the five and a half years from the expiration in 1959 of its first package to the start of its second in 1965. Since then, the procession of arrangements with the fund have often overlapped.
This chronic IMF dependence is rooted in Pakistan’s dysfunctional politics and its failure to maintain any meaningful policy continuity.
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