The IMF Should Stick to Its Guns
If countries such as Pakistan want bailouts, they need to live up to the Fund’s standards.
Khan is wary of opening Pakistan's books.
Photographer: Wakil Kohsar/AFP/Getty Images
This week marks a change of focus for the International Monetary Fund — and a new set of challenges. On Monday, Greece finally exited its IMF-led bailout program, albeit with an enormous amount of debt still weighing on its economic future. The wrangles over Greece haven’t just further damaged the IMF’s image; they helped spark a major reevaluation within the organization of the conditions attached to its lending. For years, developing countries have argued that the IMF — dominated by wealthy nations — is biased, reserving its harshest medicine for non-white, non-Western countries. Now, another debate is growing at the IMF, one that may well be framed in similar terms. In this case, however, the Fund and its Western backers should stand firm.
In one of his first speeches, Pakistan’s new Prime Minister Imran Khan went on television on Monday to ask Pakistanis living abroad to send money home. Everyone knows why: The country is facing a ballooning current account deficit. The central bank’s dollar reserves cover imports only for a month and a bit. A country in this situation would normally turn to the IMF for help.