Committee for the Abolition of Illegitimate Debt

 IMF conditionalities are causing energy prices to soar

A year and a half after the terrible floods that killed over 1,700 people, impacted 33 million and increased Pakistan’s public debt, the country is again trapped in the IMF IMF
International Monetary Fund Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org ’s nets. A $3 billion programme of remittance was signed with the Bretton Woods institution. As in the case of Sri Lanka, the programme includes cuts in public subsidies for gas and electricity, serial privatizations and facilities for large international investment funds Investment fund
Investment funds Private equity investment funds (sometimes called ’mutual funds’ seek to invest in companies according to certain criteria; of which they most often are specialized: capital-risk, capital development funds, leveraged buy-out (LBO), which reflect the different levels of the company’s maturity. investing in Pakistan.

Concretely, this results in an inflation Inflation The cumulated rise of prices as a whole (e.g. a rise in the price of petroleum, eventually leading to a rise in salaries, then to the rise of other prices, etc.). Inflation implies a fall in the value of money since, as time goes by, larger sums are required to purchase particular items. This is the reason why corporate-driven policies seek to keep inflation down. of gas and electricity prices even more unbearable for the population: gas prices are multiplied by 4 every year and electricity prices soared by 80% over the past two years. Inflation amounts to 38% on average. Moreover, Pakistan has an external debt of $130 billion, that is 90% of its GDP GDP
Gross Domestic Product Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another. . As it lacks international currencies to repay, the country contracts emergency loans with Chine, Saudi Arabia, the IMF, the United Arab Émirates in a headlong rush clearly opposed to the interests of the Pakistani people.

So Pakistan is subjected to pressure from creditors such as China or the IMF. The conditionalities imposed by the latter drag the country into an ever bigger inflation. The issue of indebtedness and submission to the IMF is therefore a crucial issue of general interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. in Pakistan. It is also crucial because Pakistan is borrowing from Pakistani banks at 22% interest (it recently borrowed $400 million from them), increasing its level of indebtedness and devoting more and more of its income to repayment and interest payments rather than to education, health, etc.

In this context of enormous inflation and gradual privatization of hospitals and many other public services, hundreds of thousands of people are falling into despair and fleeing the country in the hope of finding better living conditions elsewhere.

  A most unstable political situation

Now imprisoned and barred from standing in the 2024 parliamentary elections, Imran Khan and his Pakistan Justice Movement (PTI) were in power from 2018 until April 2022, the year in which his government was censured. Between 2022 and 2024, Imran Khan narrowly escaped an assassination attempt and was imprisoned for failing to declare certain “diplomatic gifts.” In spite of all these events, he has remained very popular in Pakistan and his party, which was not permitted to contest the legislative elections on 8 February 2024, fielded independent candidates and came out on top. The other parties then formed a coalition to prevent at all costs Imran Khan’s supporters from coming to power.

In short the political situation in Pakistan is most unstable and repression is very strong. This instability also affects the tense diplomatic situation between Pakistan and India, Afghanistan, and also Iran.