IMF blames Dar, Shaukat Tarin for derailing programme
Describing the failed four-year Extended Fund Facility (EFF) as a “missed opportunity”, the IMF blamed both the PTI and PDM, particularly under the economic stewardship of Shaukat Tarin and Ishaq Dar, for irresponsible budgetary expansion and exchange rate interventions, respectively. The IMF staff report released after the signing of the $3 billion Standby Arrangement detailed step-wise ‘stop and go’ cycles of the $6.5bn EFF that repeatedly went off the track over almost four years. The fund separated the programme period broadly into three phases: first, an early phase with considerable success in stabilising the economy; second, the pandemic phase; third, an extended stop-and-go phase. The sequence of shocks (Covid-19, Ukraine war, 2022 floods) coupled with compounding policy reversals in the second half of the programme required multiple recalibrations and the original programme goals fell out of reach. Calls out Tarin for ‘irresponsible’ budgetary expansion, Dar for ‘exchange rate interventions’ Soon after July 2019, the authorities’ decisive policy implementation started to reverse Pakistan’s large imbalances, allowing for successful completion of the first review in December 2019. The external adjustment advanced quickly as the transition to a market-determined exchange rate proceeded in an orderly way and fiscal performance was consistently strong.