Pakistan’s current IMF programme is its ninth in the past three decades. It has stabilised several macroeconomic indicators, with inflation falling from its previous peak, foreign exchange reserves improving modestly, and the fiscal deficit narrowing. However, these indicators do not cover the whole story. The more important question is not whether stability is being achieved, but who is paying for the stabilisation. It also raises an important question: is the programme fixing the root causes of the crisis or just managing its symptoms?
The IMF’s conditions include increasing electricity and gas tariffs, expanding the tax base, reducing subsidies, and maintaining tight monetary and fiscal policies. These measures place the greatest burden on wage earners, small businesses, and middle-income households. Rising energy prices affect workshops, small manufacturers, and salaried families far more than large industrial groups. Similarly, the expansion of the tax net has relied heavily on higher taxation of salaried individuals and formal businesses, while agricultural income, real estate gains, and the wealth of influential business families remain comparatively protected.
As a result, many of those who played little role in creating the economic crisis are carrying much of the responsibility for the recovery. Historically, the Pakistani state has often protected elite interests, not by openly resisting IMF conditions, but by selectively implementing them. Reforms that would significantly affect powerful groups tend to move slowly, while programme targets are frequently met through temporary measures or accounting adjustments.
The energy sector’s circular debt reflects this pattern. Governments have repeatedly restructured or partially cleared these liabilities, only to see them return because the deeper issues of pricing mechanisms, governance failures, and electricity theft were never fully addressed. More broadly, the programme does not fundamentally confront the reasons Pakistan repeatedly returns to the IMF. Agricultural land ownership remains lightly taxed, the real estate sector continues to absorb vast amounts of wealth with limited taxation, and the commercial activities associated with the military remain largely outside public financial accountability.
Stabilisation in this regard can be seen as transferring the weight of adjustment from those who mismanaged the economy to those who had little influence over its direction. The programme may succeed according to its official benchmarks, but unless these structural issues are addressed, the conditions that create future crises are likely to persist.