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Pakistan accepts 11 IMF conditions

Discussion in 'Pakistani Siasat' started by fatman17, Nov 2, 2008.

  1. fatman17

    fatman17 PDF THINK TANK: CONSULTANT

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    Pakistan accepts 11 IMF conditions

    Sunday, November 02, 2008

    By Mazhar Tufail

    ISLAMABAD: After minor changes in the 11-point agenda of the International Monetary Fund (IMF), the Pakistan government has agreed to gradually impose the Central Excise Duty (CED) on services and agriculture sectors at the rate of eight to 18 per cent in place of the General Sales Tax (GST), The News learnt here on Saturday.

    “In view of the IMF demand, the Pakistani currency will also be devalued after slight changes in the discount rate and exchange rate will be decreased officially by six to seven per cent,” an official in the Ministry of Finance disclosed, wishing to remain anonymous.

    Moreover, the official said the release of 60 per cent funds for the next three quarters of the current financial year, under the Public Sector Development Programme (PSDP), would be reviewed downward to 45 per cent.

    According to the official, the foreign assistance flow had already declined by 40 per cent because donors had refused to provide funds for new projects at the federal and provincial levels under the PSDP against the ongoing projects funded by the Japan-IBRD, the World Bank, the Islamic Development Bank and the Asian Development Bank.

    ìThe IMF proposal received by the federal government in the last week of October contained 16 conditions having 180 points that were discussed in four meetings between Pakistani and IMF officials in Dubai,î the official disclosed.

    Eleven of the 16 conditions have been accepted with slight changes,î he added.

    The official said that major conditions accepted by the Pakistan government included changes in the Islamic Development Bank loans and differentiation between loans and grants, devaluation of rupee, freezing of non-development expenditure under the defence budget for the last three quarters of the current financial year, non-provision of supplementary grants to government departments, ending subsidy on gas and electricity, 20 per cent reduction in non-development expenditure of civil departments and federal ministries, increase in markup rate of banks and on inter-bank transactions, uniformity in the inter-bank and open market dollar exchange rate and stoppage of government financial intervention in stock markets.

    ìUnder the conditions accepted by the government, the IMF will be informed at the time of the issuance of credit line by any international financial institution, including the World Bank or immediately after it,î the official said.

    ìThe matters on which the government and its financial managers have differed with the IMF include release of $1.5 billion to$2 billion for the current financial year under the annual assistance package,î he said.

    The government wants the IMF to provide $3 billion and another $1.5 billion to $2 billion for adjustment of the loan instalments and maintenance of the balance of payments during the current financial year, said the official.

    ìBut the IMF wants to release $2 billion for repayments in the first six months after reaching the agreement for saving Pakistan from default and another $500 million for the stability of the national economy,î he said. ìFor this too, the IMF wants increase in the markup rate on the already approved 600 million World Bank loan and grant,î he added.

    The official opined that despite all the tough conditions, objections and differences, Pakistan would be compelled to seek the IMF assistance package because under the IMF pressure on the Friends of Pakistan, no friendly country has so far agreed to extend loan to Islamabad to meet its repayment obligations. ìTherefore, the government has decided to write a letter of intent to the IMF for assistance,î he said.

    thenewsinternational.com
     
  2. muse

    muse PDF THINK TANK: CONSULTANT

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    How Awful was the Musharraf regime, no really, how awful -- oil is now in close ot half it's price, and yet this "democratic" government has needed the prod of international institutions to do what had to be done -- the predictions about the agriculture sectored was not far off the mark.

    The structure of taxes Pakistanis must pay ought to be much broader, the politicians seem to fear their international benefactors more than than the so called "jack boots, BAYONETS and nooses" - something is wrong with that picture. .
     
  3. Myth_buster_1

    Myth_buster_1 SENIOR MEMBER

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    is their mention of defence cut:undecided: i am too scared to read the awful conditions.
     
  4. muse

    muse PDF THINK TANK: CONSULTANT

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    I'm not so sure I know what this means "Non-Developmental expenditure.."? Who dat?
     
  5. RescueRanger

    RescueRanger PDF THINK TANK: CONSULTANT

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    I am not happy too sure about the agricultural tax, the only people affected by this will be the poor. Our Agriculturalists are already suffering for lack of availablity of water, urea fertilizer and now this tax will break their backs!
     
  6. p2prada

    p2prada BANNED

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    Some info on non development expenditures.

    http://www.dsp.dla.mil/APP_UIL/displayPage.aspx?action=content&accounttype=displayHTML&contentid=21

    NDI(nondevelopmental item) refers mainly to R&D. Both civilian and military.

    But, here the congress is referring to DoD or the Department of Defense in the US.
     
    Last edited: Nov 2, 2008
  7. p2prada

    p2prada BANNED

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    you forgot to include the next condition too.

    Federal Ministries also refers to the Minister of Defense.
     
  8. fatman17

    fatman17 PDF THINK TANK: CONSULTANT

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    agri tax is for the landlords and jaghirdars who go scot-free without paying anything! this will be difficult to implement as they r all sitting in parliament.
     
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  9. fatman17

    fatman17 PDF THINK TANK: CONSULTANT

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    i am sure there is because pakistan has accepted 11 of the 16 points presented by the IMF. IMF reportedly wants a 30% reduction in the non-developmental expenditure over the 09-20 period (11 years). this shouldnt be difficult to benchmark to achieve.
     
  10. su-47

    su-47 SENIOR MEMBER

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    so any idea what pakistan's defence budget will be in the next fiscal year? by what percentage will it be lowered?
     
  11. IceCold

    IceCold PDF VETERAN

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    What the hell? Where are we going with this? Ruppee is already too low, making it any lower is like ending your own currency and that too in a time when local currencies against dollar were getting stronger. I have a bad feeling, however Nation deserves it since they didnt like it when dollar was good old 60 ruppee under musharraf era.
     
  12. courageneverdies

    courageneverdies SENIOR MEMBER

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    IMF is a trap for the countries with financial troubles like Pakistan. I am amazed at the Pakistani Govt. that why is it going to IMF again despite of the lessons we learnt from the past experiences. What if we go to Iran, Saudi Arabia or to our own foreign settled Pakistanis?:what:

    KIT
     
  13. p2prada

    p2prada BANNED

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    It is better if LAND PROPERTY is taxed rather than PRODUCE. It will remove the burden from farmers and the landlords can be taxed more suitably. Why hit those poor people living on subsistence farming?

    Even the business establishments in karachi can be taxed for OWNING real estate.
     
  14. p2prada

    p2prada BANNED

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    Paksitan has already tried that and failed. IMF was pakistan's PLAN C. Even the americans and partially the chinese failed to help.
     
  15. p2prada

    p2prada BANNED

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    How do you expect anyone to answer that??? All we know is there wont be an increment.