• Tuesday, August 20, 2019

Difference in the IMF conditions

Discussion in 'Pakistan Economy' started by war&peace, Jun 24, 2019.

  1. Abdussamad

    Abdussamad BANNED

    Messages:
    890
    Joined:
    Feb 21, 2009
    Ratings:
    +0 / 354 / -2
    Country:
    Pakistan
    Location:
    Pakistan
    They are indeed immune to failures. Until someone (China?) sets up competing institutions that is.
     
    • Thanks Thanks x 1
  2. VCheng

    VCheng ELITE MEMBER

    Messages:
    38,116
    Joined:
    Sep 29, 2010
    Ratings:
    +57 / 32,210 / -4
    Country:
    Pakistan
    Location:
    United States
    That will happen soon, I think by the end of this month. Then all the world will flock to China, of course.
     
  3. Abdussamad

    Abdussamad BANNED

    Messages:
    890
    Joined:
    Feb 21, 2009
    Ratings:
    +0 / 354 / -2
    Country:
    Pakistan
    Location:
    Pakistan
    Well they did try with the asian infrastructure bank which was supposed to be their version of the ADB or World Bank. We thought it might be the first of many.
     
  4. Protest_again

    Protest_again BANNED

    Messages:
    297
    Joined:
    May 19, 2019
    Ratings:
    +0 / 209 / -0
    Country:
    India
    Location:
    India
    Yet, that institution itself is so near yet so far for Pakistanis. ADB/World Bank/AIIB are all development banks, they only lend to countries that are able to return back the loan amount. So they all rely on IMF evaluation of a country for extending the loan. Pakistan itself went for IMF to get that certificate.
     
  5. Abdussamad

    Abdussamad BANNED

    Messages:
    890
    Joined:
    Feb 21, 2009
    Ratings:
    +0 / 354 / -2
    Country:
    Pakistan
    Location:
    Pakistan
    China has been lending a lot of money to us:

    We also got a further 5 billion from the Arabs:

    Source

    The atheists and the arabs kept us afloat while we pondered an IMF bailout
     
  6. mastaan

    mastaan FULL MEMBER

    Messages:
    1,189
    Joined:
    Mar 30, 2011
    Ratings:
    +2 / 1,968 / -2
    Country:
    India
    Location:
    Germany
    Not gonna defend or justify my knowledge of Economics - what is the point? But for sake of argument a few things to consider
    - 19bn dollar CAD is nothing. you are a 300Bn economy with 6.5% CAD to GDP ratio. To give you a relative cue - US CAD is around 500Bn in 2018 and that is around 6% of GDP. So, absolutes don't matter
    - I see no relief in the package except electricity and oil prices coming down, which would have come down anyways, if the assumptions proved to be wrong (which they did) - That is not negotiation, but a normal ratchet mechanism of IMF. Have done a couple of IMF deals in project financing side in Africa, so speak with some knowledge
    - Power sector performance can only be acknowledged after the books are closed and audit is done - that would have happened only last month and therefore would not give enough time to change ratchet mechanism in such a big negotiation so quickly. Rates changed, because the assumptions were wrong and the previous govt either did not defend themselves properly or simply did not got to the defending point
    - Lastly, Pakistan has not done any reforms in IK's first month to say that he brought the change in those numbers to that extended, or else those assumption numbers would have been hit

    Largest point however is - Why would a country, which is on the amend (and you do seem to highlight that) not take a lower interest rate, if they know they will keep doing better? To allow 9% to go up to 10.75% is crime and could also be a big reason why the power prices and oil price increase is not that draconian, because the increased pricing on interest (and there is no reduction) would have priced in the higher risk coming from changes.. my 2 humble cents
     
    • Thanks Thanks x 1
  7. Pakistansdefender

    Pakistansdefender SENIOR MEMBER

    Messages:
    2,290
    Joined:
    Sep 22, 2016
    Ratings:
    +1 / 1,890 / -0
    Country:
    Pakistan
    Location:
    Pakistan
    Please go ask an independent economist of you don't believe me.
    Interest rate was up to keep the inflation down . That's how economics work. While you should remember that inflation has still not touched double digits and food inflation was even lower . Compared to previous government where inflation was in double digits and much better then ppp when inflation was 25 percent.
    You do have to sacrifice some where friend . As the budget passes and some other reforms took place inflation would fall even lower to 7 percent and interest rate would go down.
     
  8. Verve

    Verve ELITE MEMBER

    Messages:
    8,189
    Joined:
    May 15, 2014
    Ratings:
    +4 / 9,297 / -0
    Country:
    Pakistan
    Location:
    United Kingdom
    What would you have done instead?
     
  9. Retired Troll

    Retired Troll ELITE MEMBER

    Messages:
    39,908
    Joined:
    Apr 5, 2017
    Ratings:
    +16 / 35,110 / -11
    Country:
    Pakistan
    Location:
    Germany
    declare banktrupcy
    refuse to deal in interest by pointing out constitution of Pakistan.

    declaring financial emergency gives the gormint legislative powers.
     
  10. Verve

    Verve ELITE MEMBER

    Messages:
    8,189
    Joined:
    May 15, 2014
    Ratings:
    +4 / 9,297 / -0
    Country:
    Pakistan
    Location:
    United Kingdom
    This rotten constitution doesn't prohibit interest!

    Rip the constitution apart and write a new one first before using it as a reason.
     
  11. Retired Troll

    Retired Troll ELITE MEMBER

    Messages:
    39,908
    Joined:
    Apr 5, 2017
    Ratings:
    +16 / 35,110 / -11
    Country:
    Pakistan
    Location:
    Germany
    nope.

    you are wrong.

    please do understand that Interpretation of law is subjektive.

    the constitution Puts it as a duty to the government to reduce/eliminate usury and also provide simple enivironment for change and rehaul.

    PTI simply is inkompetent if not corrupt as well
     
  12. mastaan

    mastaan FULL MEMBER

    Messages:
    1,189
    Joined:
    Mar 30, 2011
    Ratings:
    +2 / 1,968 / -2
    Country:
    India
    Location:
    Germany
    But i never even mentioned local fiscal measures in my post. i am simply quoting on the term sheet presented here.. I don't even know about the local fiscal measures.. i was merely making a point on how the data is presented as a win, when it is not.
     
  13. Verve

    Verve ELITE MEMBER

    Messages:
    8,189
    Joined:
    May 15, 2014
    Ratings:
    +4 / 9,297 / -0
    Country:
    Pakistan
    Location:
    United Kingdom
    Is your imaginary government going to be any better? PDP in the gutter so what's next?
     
  14. Retired Troll

    Retired Troll ELITE MEMBER

    Messages:
    39,908
    Joined:
    Apr 5, 2017
    Ratings:
    +16 / 35,110 / -11
    Country:
    Pakistan
    Location:
    Germany
    PDP dissolved in best interest of the Country.

    I refuse to take any part in Exploitation of Pakistanis. those who want are ruling Pakistan.
     
  15. Verve

    Verve ELITE MEMBER

    Messages:
    8,189
    Joined:
    May 15, 2014
    Ratings:
    +4 / 9,297 / -0
    Country:
    Pakistan
    Location:
    United Kingdom
    So who is going to do every single thing you desire? YOU!?