In truth, Mr Khan's government tried hard to keep its distance from the fund.Instead of agreeing to a deal as soon as it came to power last August,it turned for help to friendly countries, including Saudi Arabia (which gave $3bn and deferred a similar amount of oil payments),the United Arab Emirates ($2bn already and more to come) and China ($2.2bn).
China is investing heavily in Pakistan's roads, ports and power plants:the so-called China-Pakistan Economic Corridor (CPEC). Some view this lending with suspicion,seeing Pakistan as a victim of China's "debt-trap diplomacy".Such an assessment seems premature. CPEC spending may have contributed to the increase in Pakistan's imports(the country's current-account deficit exceeded 6% of GDP in the year to June 2018).But because this import spending was presumably matched by an inflow of Chinese capital,it cannot have been responsible for the dangerous dwindling of Pakistan's foreign-currency reserves over the past year.
That was Pakistan's own fault. The previous government maintained an exchange rate that was too strong for exporters and fiscal spending that was too strong for its revenue-raising powers.Restoring stability was always going to require the kind of painful policy reforms the IMF often prescribes and oversees.Not that the IMF will find it easy. Pakistan is a regular taker of its loans but not a diligent follower of its advice.Many of the reforms it has just promised have been pledged repeatedly before, including widening the tax net,rationalising utility prices and respecting the central bank's autonomy.
Successive governments have been slow to follow through, afraid of angering powerful domestic constituencies.But the IMF has been similarly reluctant to cut Pakistan off, for fear of the upheaval that would ensue."Governments have tried to 'game' the IMF, and achieved partial success each time,"write Ehtisham Ahmad and Azizali Mohammed, former IMF advisers.Pakistan's public might dislike the IMF less, if they knew how frequently their leaders disregard it.