Lee Kuan Yew, former Prime Minister of Singapore, is right when he says: "The people have to pay dearly and long for the sins and crimes of their leaders."
What is ahead for Pakistanis? This shocking report from Cairo after the implementation of the IMF reforms may provide some indication to Pakistanis:
"Egypt has seen a recent growth in the so-called 'used food' markets, as citizens bear the brunt of IMF economic-reform program, Middle East Monitor reported on April 18, 2019. Markets selling scraps of food have become increasingly common in Greater Cairo, home to more than 20 million people, with the remains of meals from restaurants and hotels offered to families at a discounted price. Defective food products, ranging from processed meats and pasta to cheese and juice, are also on offer, with many of the goods unpackaged, with no information as to where or when they were made.
"A shopper, Asma Mohammed, said she even had
to buy chicken bones and necks from the street to make a stock for her family
of five after she was unable to afford them at the usual
"The prices of basic food items, water and fuel have soared in recent years after state subsidies were cut and VAT was introduced in the country for the first time. The new policies come as part of Egypt's commitment to economic reforms stipulated by the International Monetary Fund (IMF) in accordance with the country's loan agreement.
"However, the policies have added to the financial woes of many millions of Egyptians living below the poverty line, who have complained of being unable to afford basic necessities since the price jumps."
Egypt has been praised for its commitment to the measures; during its fourth review of the program by the IMF last month, officials said.
Tellingly, Dr Reza Baqir, the new Governor of the State Bank of Pakistan, was IMF Representative in Cairo till recently.
Third World countries' debt
The International Monetary Fund was established in 1944 as a lender of last resort to countries facing balance of payment difficulties, a lifeline for countries on the verge of insolvency.
By the 1980s a number of Third World countries turned to this lifeline, unable to pay back the massive loans they had received from western commercial banks in the 1970s.
The Third World countries are now in debt trap. External loans to developing country governments more than doubling from $191 billion in 2008 to $424 billion in 2017.
As a condition for financial assistance, the IMF requires governments to make harsh economic adjustments, such as cutting spending on socials services, and ending price subsidies on such essential items as food and fuel.
Developing nations have long viewed the IMF with suspicion for promoting disastrous privatizations. The IMF and the World Bank provide loans only if the poor countries privatized their economies and allowed western corporations free access to their raw materials and markets.
Tellingly, in 2014, the IMF's own auditor said in a report that the IMF continues to be seen as a club for rich countries, limiting how much other nations trust its advice as objective. Many of the IMF's members still believed the lender treated its bigger shareholders, including the United States and Europe, more leniently than others, the IMF auditor report said.
That perception was magnified when the IMF lent billions of dollars to euro-zone countries in distress, including Greece, Ireland and Portugal, with loans that were much larger than the countries' economies.