Pakistan, the IMF and debtocracy – Dr Ikramul Haq


All indicators show that our successive governments, including the incumbent one, due to imprudent economic and tax policies, have pushed Pakistan into chronic, unremitting, unceasing debt-enslavement. Debtocracy is yet to be part of public discourse in Pakistan vis-à-vis state sovereignty and the future of democracy. This was highlighted way back in May 2017 by activist and academic, Ammar Ali Jan, when he wrote an article highlighting the point. However, it is now four years later and the nation continues to suffer massively on both the health and economic fronts – in the aftermath of the deadly third wave of Covid-19 – and still no one is discussing debtocracy. Not in in the corridors of power, TV talk shows or even on social media.

Our rulers are busy spouting the usual clichés about the independence of Kashmir and Palestine while ignoring how the US, its western allies and cronies have rendered a nuclear state economically toothless. For Pakistan’s debt-enslavement has meant that the country has no input in the arena of international politics. Indeed, reports of us receiving 440 tonnes (19,032 bags) of rice under Saudi Arabia’s Zakat al Fitr project – to be distributed to Punjab and Khyber Pakhtunkhwa – exposes a party that came to power in 2018 with the promise of smashing the begging bowl. By now, it is well-established that debtocracy is not a mere economic issue.

Once a nation is trapped in the ‘debt prison’, political subjugation inevitably follows. The exploitative neo-colonial powers, through international lending institutions like the International Monetary Fund (IMF) and others, force enslaved nations to pursue an anti-people agenda by imposing regressive taxes combined with high costs of living. Pakistan represents a classic case study of what happens when a nation falls victim to debtocracy while highlighting the devastating repercussions for poor countries. If the SBP (State Bank of Pakistan) Amendment Bill 2021 is passed, the result will be further compromises on our sovereignty.

The worst part of debtocracy is ‘learned helplessness’. The people, despite monstrous inflation, still show signs of endurance and submission. Thus, there are no mass protests of the kind that swept through the Middle East during the Arab Spring of a decade ago

Economists mention debt and liabilities only in terms of hardcore statistics. Of course, these are important. But more vital are the political issues linked to debtocracy. Thus, the IMF agenda needs to be exposed and countered. And in doing so, the following fundamental questions need to be asked: why are our elites, in the name of the people, recklessly borrowing money and paying huge amounts in debt servicing (three times the defence budget)? And how do we break free of this vicious cycle?

Histories of subjugation, resistance and liberation in various parts of the world present vital lessons for humanity to throw off the shackles of debt. Yet this cannot be done without waging mass resistance against the elites and the oppressors who act as the cronies of the neo-colonial exploiters. India, under the British Raj, was ruthlessly plundered by the masters of Empire. This phenomenon continues in the post-colonial era both here in Pakistan and elsewhere and was brilliantly exposed by Zulfikar Ali Bhutto in his book, ‘Myth of Independence’.

One also needs to recall the ‘Salt March’, also called Dandi March or Salt Satyagraha, the historic non-violent protest led by Mahatma Gandhi in March-April 1930 against British salt monopoly. The march was the first act in an even-larger campaign of liberation. Among others, Martin Luther King Jnr cited the Salt March as critically influencing his own philosophy of civil disobedience. Gandhi, he said, had sent a simple message by grasping a handful of salt on the beach at Dandi, and millions answered his call.

There is a need for a global campaign against debtocracy imposed through the IMF. Indeed, back in March, the PPP’s Senator Raza Rabbani, a noted lawyer and former chairman of the Senate, termed the IMF the new East India Company, given that a current employee of the Fund had been appointed the SBP governor. He went on to denounce this move as the colonisation of Pakistan by the international financial imperialists. This is something that this scribe touched upon in his book, co-authored with Huzaima Bukhari, ‘Tax Reforms in Pakistan: Historic & Critical View’.

The worst part of debtocracy subjugation is ‘learned helplessness’. That is, the people, despite monstrous inflation, are still showing signs of endurance and submission. Thus, there are no mass protests of the kind that swept through the Middle East during the so-called Arab Spring of a decade ago.

The ruling PTI and those in opposition are both guilty of national debt accumulation and seek to defend this policy by framing it as ‘help’ by lenders, donors and friendly countries. Do we need costly loans for debt servicing or soft long-term loans for development projects? Who will mobilise the masses to counter the prevailing narrative of misinformation?

Like its predecessors, this government also believes in patchwork assistance here and there that will never cure the menace of the debt-trap. The outrageous debt burden and huge fiscal deficits are symptoms of this illness and these will keep on recurring unless the root causes are treated and cured. The removal of which (elitist economic structure, heavy unproductive expenses, non-tapping of natural and human resources and ending crony capitalism) needs political will as well as concrete agenda. However, neither the PTI nor any other party is equipped to do the needful.

The writer, Advocate Supreme Court, is Adjunct Faculty at Lahore University of Management Sciences (LUMS). Email:; Twitter: @drikramulhaq