Economics & Business International Affairs

IMF bracing for a begging bowl

Islamabad: Pakistan Economy Watch has said that IMF (International Monetary Fund) is suffering from financial problems and preparing to get aid from wealthy nations. IMF has no option but to ask wealthy Asian nations for help. The fund’s lending capacity of $250 billion dollar and present reserves of $210 aren’t sufficient in comparison to global financial crunch that require trillions of dollars.

Asian countries should condition investment with reforms in lender
It is an excellent opportunity for IMF to address its huge credibility issue. Countries like China, Japan and Arab nations should push for much needed reforms in the institution before deciding about any investment. This would be natural as IMF also pushes poor countries for reforms, said Dr. Murtaza Mughal, President, Pakistan Economy Watch.

This institution should have adopted a role to promote international financial stability but the reality is otherwise and only one country on earth was under its programme few months back. The global turmoil has changed situation in favour of IMF. “Still different countries seek help from IMF as last option which is an indicator of fading importance and damaged repute,” he added.

US has 17 per cent share in the lending agency with absolute powers while strong economy like China has only 3.5 per cent share. A just voting system will help IMF revive its standing. Failure to take timely corrective steps will push this institution in the background. Countries with ample reserves have already started providing direct aid to needy nations bypassing IMF.

Poor countries pay for their mistakes while whole world pay for the slippages of rich nations. Therefore, IMF should also focus on weaknesses in the economic models of developed nations. IMF can sell some of its assets to overcome the present problems.-Pak Economy Watch

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Noreen Gill

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