The International Monetary Fund`s package might have helped the country improve its foreign exchange reserves position, the labour leaders fear that it would lead to a surge in unemployment and increase in poverty. The deal obligates the government to curtail development expenditure and withdraw certain subsidies.

They stressed that the government should curtail its recurring expenditure and force the mighty rich families, who transfer billions abroad, to contribute more and bring money back to Pakistan.

A majority of the labour leaders believe poverty would grow with the passage of time, and unless broad-based changes are introduced in the entire socio-economic system, the poor would continue to suffer, and loans from donors would continue to overburden people by adding to the misery of fixed income group.Rafiq Khan, President, National Labour Federation of Pakistan, strongly opposed acquisition of loans and said that instead of obtaining loans from donors, World Bank or International Monetary Fund, the four richest families of the country could have brought over $50 to $60 billion from their accounts abroad. Moreover, Pakistan`s bureaucrats and capitalists who sent $350 billion abroad should have been asked to invest in Pakistan to change the face of the country.

He said donor agencies, in fact, wanted to subjugate us economically and politically, and they have been extending loans to usurp our political and economic independence.

Referring to donors conditionalities of cut in defence budget, withdrawal of subsidies to farmers, and less payment to pensioners and privatisation of sensitive institutions, he said it was meant to push us to the wall and it would result in unemployment, and increase poverty.

Shamshad Qureshi, chairman, Pakistan Steel Labour Union (CBA), was optimistic of a positive outcome of the IMF loan package, but said that such loans be spent on project financing.

Electricity and water projects be initiated and steps be taken for welfare of labourers by improving their wage structure, he explained.

Moreover, small steel mills be set up to cut imports as more than 60 per cent of steel being used in the country was being imported and Pakistan Steel was unable to overcome the shortage.

He said loans cannot be termed harmful; it all depends on their management and utilisation. The condition in which Pakistan acquired the loan was alarming and country was facing a tremendous pressure and there was a destabilisation in the economy.

Referring to minimum wages of workers, he said that although the prime minister had fixed Rs6,000 as minimum wages, most industrial units are yet to implement the decision.

Mr Karamat Ali, chairman, Pakistan Institute of Labour and Education Research (Piler), said that IMF loan was not a new phenomenon.

“We have acquired such loans in the past, say in 1988, but its negative effect was borne by the poor labourers who were hit hard by the consequence of prescriptions of donor institutions that led to scrapping of labour-friendly laws, introduction of contract labour, temporary employment under deregulation, and that tilt of labour laws now was not in favour of labourers.”

Exactly 20 years after it was stated that the loans were meant to improve balance of payments position, debt-servicing and to overcome poverty, such problems are still there and poverty has increased, balance of payments position deteriorated, and security of common citizens has been affected. Thirty to 40 per cent inflation has affected a majority of the population of the country.

Referring to an SBP survey, he said that 53 per cent are earning Rs5,000 per month but among them there are 26 per cent drawing less than Rs3,000. This indicates that poverty has increased.

He proposed land reforms distribution of land among the landless and a change in the entire socio-economic system.

“Presently five to six per cent landlords are occupying 60 to 65 per cent land-holdings. Governance is costly here, as at the time of East Pakistan there were 20 ministries, while at present there are 100. IMF loan would lead to a vicious circle and its cost would be borne by the common man.”

Mirza Maqsood Ahmed, president, Mazdoor Mahaz-i-Amal, was of the view that it would have a negative impact on the country as a whole and the labour class, in particular, because a major portion of this loan was not meant for development. Thus it would increase poverty, he said.

He deplored that the loan issue was not thoroughly debated and institutions were not taken into confidence. Such loans, if acquired, should be debated first and all stakeholders be taken into confidence so that accountability could be ensured and all sections get protection.

Ghulam Farid Awan, General Secretary, Pakistan Workers Confederation opposed the loan and said that as a result of its conditionalities, millions of labourers would lose jobs. He proposed cuts in government`s administrative and non-development expenditures, and expressed concern over withdrawal of subsidies. He saw no hope for improvement in economy owing to inequalities because tax is paid only by a limited number of people and wealthiest landlords are exempted.

In the present situation, it is believed that if the number of ministries and their expenses are reduced and luxury cars and other facilities are withdrawn from ministers, secretaries and other government officials, it would result in reduced petrol consumption, and precious foreign exchange would be saved. Moreover, if the number of foreign trips and delegates is reduced, there would be no need to seek loans from donors.