• Monday, April 22, 2019

World powers blackmailing Pakistan on IMF bailout Highlights

Discussion in 'Pakistan Economy' started by ghazi52, Apr 15, 2019.

  1. ghazi52

    ghazi52 ELITE MEMBER

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    World powers blackmailing Pakistan on IMF bailout


    Highlights
    • Today Pakistan is standing on the ‘wrong side’ of these global force blackmailing Pakistan, says EAC member
    • Indian economy allowed maintaining military build-up for a longer period, but Pakistan’s economy, which was in tatters, could not allow it: Dr Khan
    • 'The well-coordinated growth numbers of Pakistan's economy by IFIs seem a planned design to create unrest among the business community'
    [​IMG]

    ISLAMABAD: Foreign powers want Pakistan to either slow down work on the CPEC or come out of it, eminent economist and Dean of Special Sciences and Humanities in the NUST Dr Ashfaque Hasan Khan told The News.

    Dr Ashfaque said Pakistan simply could not get out of this project of paramount importance, as it was good for its economy and people.

    "From the very beginning, I have been suggesting the PTI government to avoid going to the IMF this time, as the geo-strategic environment has altogether changed. In the past, Pakistan always stood on the right side of these powers,” said Khan who is also the Economic Advisory Council member.

    He argued that these powers had the clout of all major economies to dictate the IMF in Pakistan’s case.

    “Today Pakistan is standing on the ‘wrong side’ of these forces. The Indo-Pacific alliance also stands together to counter the growing influence of China in the world. Three US congressmen have recently requested that the IMF should not be allowed to lend money to Pakistan fearing that it will use this money to pay back the Chinese debt.

    Dr Ashfaque said that India also built up armed forces on its borders due to which Pakistan also took same measures.

    He said the Indian economy allowed maintaining military build-up for a longer period, but Pakistan’s economy, which was in tatters, could not allow it.

    Dr Ashfaque said the government will slice down the development budget and maintain or increase the defence budget, but political parties and the social media will begin criticising allocation of major chunk of budget for defence.

    This, he said, will create a gulf between the masses and the armed forces and that’s what the IFIs (international financial institutions) under the influence of big economies this time want under a well-planned design.

    Coming to Pakistan’s economy, Dr Khan said GDP growth numbers worked out by the IFIs such as 3.9 percent by the ADB, 3.4 percent by the World Bank and 2.7 percent by the IMF served nothing but to push Pakistan to the Fund on strict terms.

    The well-coordinated growth numbers of our economy seem a planned design to create unrest among the business community across the country.

    He said the IMF worked out 2.7 percent GDP growth for the current fiscal and 2.5 percent for the next. Dr Khan said Pakistan was most likely to come up with close to 4 percent. ’However, the Fund is also stressing the government to make the revenue target of Rs5400 billion for the next budgetary year.

    He argued that the IMF had factually made fun of it. On the one side, the Fund is predicting the lowest GDP growth, on the other side it is asking for 40 percent growth in revenue.

    “When there is growth of 2.5 percent then pressurising to make revenue target on the highest sides is beyond wisdom of all economists,” he said.

    Dr Khan said if Pakistan succumbed to the IMF pressure on the revenue target of Rs 5400 billion, then the PTI government will be left with no option but to announce a mini-budget every quarter for more taxation to achieve the revenue target making Pakistanis’ lives more miserable.

    Dr Khan feared that after the IFIs projected growth figures, rating agencies such as Standards & Poors and Moody’s will downgrade Pakistan’s ratings, making it unable to generate financings from the international market.

    He claimed that the IMF had no capacity to even work out the growth of economy for next two months.

    Mr Khan said the IMF will make Pakistan’s budget with growth in revenue target of Rs 5400, cut on development budget and massive surge on taxation and more appreciation of dollar.

    He said discount rate will also be increased which will increase the borrowing cost for the private sector. Since the private sector will not borrow loans, Pakistan’s economic activity will come to a standstill.

    With increase in dollar appreciation, the cost of Pakistan’s 60 percent raw material import which is used for industrial production has increased manifold.

    He said the government had depreciated the Pak Rupee value by over 36 percent with an aim to increase exports but unfortunately these had decreased by 11 percent. This, he said, can happen in a country where the imported materials stand at 25 percent.


    https://www.thenews.com.pk/print/45...ut-eac-member-dr-ashfaque-says-foreign-powers
     
    Last edited: Apr 15, 2019
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  2. VCheng

    VCheng ELITE MEMBER

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    Nobody is forcing Pakistan to go to the IMF. It is a decision to be made by PMIK and his government. Let us see what they decide is best for the country.
     
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  3. Death Professor

    Death Professor FULL MEMBER

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  4. Khafee

    Khafee PROFESSIONAL

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    What is the size of the loan, that PK wants from IMF?
     
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  5. zulu

    zulu FULL MEMBER

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    10 to 12 billion Dollar its finalized
     
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  6. PeaceBeWithYou

    PeaceBeWithYou SENIOR MEMBER

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    $ 6-8 billions, approval came through after Pakistan agreed not to use it to repay Chinese debt.
     
  7. Kaniska

    Kaniska SENIOR MEMBER

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    Just curious, why Pakistan approching or getting 10-12 B loan from ADB or banks that are controlled by China? In that way, you do not have to fight with influence of West?
     
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  8. PeaceBeWithYou

    PeaceBeWithYou SENIOR MEMBER

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    India might have blocked it..India has more voting power in ADB than IMF. Moreover, US and Japan have high influence in ADB when it comes to lending.
     
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  9. aasimanwaar

    aasimanwaar FULL MEMBER

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    Can any body explain. If Pakistan can gather 6 billion dollars or more from friendly countries then why they are going to Imf for same amount and that too on tough terms.
     
  10. Stealth

    Stealth ELITE MEMBER

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    Pakistan need $12 BN USD and the money which they brought from USE, Saudia and China combine was not even 6. This is the real face of so called Ummah and China
     
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  11. Mamadouso

    Mamadouso FULL MEMBER

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    There is no need to keep shifting the blame on to the IMF or India etc

    The problem is home grown - living beyond means on luxury imports, a failure to invest in dams and industry and general waste, fraud & corruption under horrendous leaders like Sharifs & Bhuttos who wasted the valuable time when it was opportunity to reform the economy.

    No other economy has gone to the IMF for 13 bailouts and so they will take advantage and bring in their tentacles all over Pakistan again.
     
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  12. CrazyZ

    CrazyZ FULL MEMBER

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    Market forces will force the pkr to depreciate...not much any government can do about it since Pakistan is low on forex. Past governments did not treat forex as a precious resource and now we must accept this reality...including going to the IMF.

    We have many enemies and must develop a resilient economy. One that is self sufficient as possible in energy, agriculture, and defense equipment. Since this affects our security, key economic decisions must come from a council of experts that part of the NSC...so that long term solutions are implemented for the national benefit...not band aids that help a specific political party.
     
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  13. Mamadouso

    Mamadouso FULL MEMBER

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    It is not anyone’s duty to hand over money when they can’t trust it won’t be wasted on corruption or abuse.

    Even a man won’t keep lending to his brother if he feels he will waste those funds on a luxury car when he actually needs to fix his house.

    PM Khan is a good man, hopefully he will be able to reform the economy but the corrupt are entrenched in the system.
     
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  14. H!TchHiker

    H!TchHiker SENIOR MEMBER

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    Pakistan should not get blackmailed then....and refuse it..IMF is not forcing Pakistan..
     
  15. Syed1.

    Syed1. SENIOR MEMBER

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    It's sad that we are in this position only because of 10 years of democracy...



    Still there are millions of people who support PPP or PML-N. With Pakistanis like these we do not even need enemies.
     
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