HUMAN development, encompassing education, health and living standards, is often at the forefront of discussions concerning economic growth and prosperity. However, with Pakistan set to enter another structural adjustment programme with the International Monetary Fund (IMF) upon the expiration of the standby agreement in April, achieving human development goals is seemingly uncertain.

The appointment of a banker as finance minister, though not a new trend, signals a focus on dealing with international institutions, but it also raises questions about prioritising human development amidst IMF-imposed austerity measures. Can Pakistan achieve human development under IMF programmes? That is a key question. Unfortunately, the answer is not in the affirmative.

Signing the IMF agreement implies that energy prices will go through the roof because of increased tariffs, and the general sales tax (GST) will be further increased to raise government collection in the short term. The salaried class will feel the heat of enhanced taxation, and government spending will be curtailed to achieve stability, and prevent the economy from heating up. This means that the government spending on the social sector will remain minimal.

The fact that the budget for the Public Sector Development Programme (PSDP) has witnessed a constant decline since 2019 indicates the sorry state of affairs in this critical regard. The government will not be able to aid its lowest strata of society, mainly because rapid inflation growth is often associated with IMF programmes.

All these factors will hurt the middle and lower classes dearly because the elitist nature of our state does not ask the privileged class to share the financial burden. Along with it, black marketing will rise, mainly because higher taxation will undermine competition. As a result, the state will fail to protect its citizens from the perils of inflation, unemployment and malnutrition.

However, since Pakistan does not have any other choice, it is high time the state changed its priorities. Pakistan needs to implement the upcoming IMF programme in letter and in spirit, and then prioritise the critical agenda of human development.

Zakir Ullah
Islamabad

Published in Dawn, September 7th, 2024