The plan

"The 36-month programme under the IMF's Extended Fund Facility aims at bringing down inflation and reducing the fiscal deficit to more sustainable levels. The programme also includes measures to help achieve higher and more inclusive growth." IMF Survey 4 September 2013.
"But the programme is aimed at improving Pakistan's public finances, reducing public debt and, you know, helping Pakistan get back on the path to a sustainable, more inclusive growth, and so on.", Gerry Rice of the IMF's Communication Department, 23 May 2019.
What will be, will be, the future's not ours to see.
Except that the above two statements have so much in common that they qualify for lookalike twins, and we ended up doubling our national debt after the last programme.
Rs 60,000 billion. Que Sera Sera!
The staff level agreement 2019 with the IMF requires improving public finances and reducing public debt through tax policy, and more equal and transparent distribution of taxes.
Tax policy is double-speak for increasing income tax and sales tax rates, and equal distribution could mean they are going to tax agriculture this time around; feudal lords, get your act together in the parliament.
But here is the glitch, even if you forcibly, by completely eliminating development expenditure, bring down the fiscal deficit to 6%, you still have to borrow; so how exactly does the plan envisage to bring down public debt?
Que Sera Sera!
And why have more taxes never meant increasing customs tariffs in any IMF program ever?
Fool me once, shame on you; fool me twice, shame on me; fool me every time - then I'm an idiot!
IMF's fresh programme also requires a comprehensive plan for cost recovery in the energy sectors and State-Owned Enterprises (SOEs); the resultant savings to be used for social protection and human capital development.
Let me see if I get this right: the plan is to eliminate the subsidy on gas and electricity bills, thereby slashing the disposable incomes of the entire middle class, firing most everyone employed by SOEs, and then focusing on human development by giving alms.
The problem with this plan ab initio is that if the objective is cost recovery, there will be no savings; and we would have sold all our holdings to imperialists.
This is rather amusing, if not ridiculous.
The IMF's new programme also wants the State Bank of Pakistan to have operational independence, focus on reducing inflation, and let the market determine the rupee value; the last of which supposedly to ensure that all resource are allocated to the financial sector.
Eureka!
Just figured out how the plan will ensure GDP growth.
Since the SBP is now independent, it will not lend to the government anymore - thereby forcing the latter to borrow entirely from commercial banks at higher rates with an already weak rupee, ensuring that banks make hefty profits since all resources get appropriated to the financial sector, but we have GDP growth.
What about inflation?
According to some vague rule, interest is the Central Bank's weapon of choice for fighting inflation and the SBP has already assumed DEFCON 2; the interest rate has been kicked up to the next level.
But something smells in Denmark.
The policy rate has been increased from 5.75% in January 2018 to 12.25% in May 2019 but inflation continues to grow, so the Rule is definitely not operating; but here is the clincher, inflation went up from 3.8% in January 2018 to averaging around 8% in 2019.
So how does 12.25% correlate to 8%; and have interest rates ever worked in controlling inflation in the entire history of Pakistan?
And the rupee has been ditched, left to the vagaries of the free markets.
Nothing is for free.
Free markets is defined as allowing developed countries free access to developing countries markets, thereby achieving abject control of the latter's economy for free.
The IMF's latest programme also expects a favourable business environment which facilitates trade; which, in turn, is defined as developed nations freely exporting to developing countries struggling with an external debt trap, and possibly being dictated to by lenders to have more free trade.
Absolutely, so much free trade will do wonders for our trade deficit.
A weaker rupee, which will continue to get weaker because of more free trade, will ensure more inflation since we have stopped manufacturing and import even our basic necessities.
But more inflation will mean even higher interest rates, and more free trade will result in an even weaker rupee and more inflation.
From circular debt, to debt trap, to trapped circularly.
But the plan has one glitch.
Accounting for more taxes, higher utility bills, more interest on mortgages, a weaker rupee, and high inflation, the common man will not have enough left to buy food; not sure how the IMF excel sheets tied up in their Pakistan model, but in the real world the numbers just don't add up.
Recession appears inevitable; a direct consequence of ill planned austerity.
Things appear bleak and the light at the end of the tunnel has an ominous rushing sound.
Unless... we do something we have never done before... like have our own plan. (The writer is a chartered accountant based in Islamabad. Email: [email protected])