Capitulating to IMF will cause massive unemployment, warns economist

[Abdussamad]

why not ban all imports of goods that can be manufactured here? why not ban import of components/raw material that are available here? why not force the industrialists to raise the quality of their products so that it can be exported? we are an agricultural country and yet we are importing fruits,vegetables, cheese, cream, chocolates etc from abroad. force the chemical and pharma companies to use local raw material, force the raw material producers to maintain quality. force the automotive industry to source as much parts as possible locally, toyota was established in 90's it has been nearly 30 years and they are still importing stuff, whereas when it was established, it was promised by them that they would localize the production.

In a free market economy you can't force people like that. You would have to buy everyone out and then you can run their businesses. That would be a communist system. But communism doesn't work because it fails to account for human nature.

This idea of forcing people to do this or that is the most common idea on this forum and in other Pakistani forums. It's a military or fascist mindset which has taken root in this country. This is not what economic policy is. Economics is creating the right incentives so that people voluntarily do what is best for the country.

 

[S.Y.A]

Economics is creating the right incentives so that people voluntarily do what is best for the country.

in other words forcing people to do this and that.

In a free market economy you can't force people like that. You would have to buy everyone out and then you can run their businesses. That would be a communist system. But communism doesn't work because it fails to account for human nature.

no one is talking about taking over businesses. and it is not a free market, it is a market run by mafias and cartels. what I am talking about is stricter regulation of the market.

 

[maximuswarrior]

The IMF route, whether good or bad, is a lengthy route. The fiscal problems aren’t going to be resolved in a few years. It also means more loans, but the real question is whether this is the last installment.

These loans are useless if Pak economy doesn’t recover. These loans are only effective if the government takes tough and unpopular measures to correct course. That means tax collection, lesser imports and lesser useless spending.

 

[Abdussamad]

in other words forcing people to do this and that.

No you set policies that encourage people to do what is best for the country. You don't force anyone. If you can't understand the difference then I can't help you.

no one is talking about taking over businesses. and it is not a free market, it is a market run by mafias and cartels. what I am talking about is stricter regulation of the market.

No you were not. You kept using the word force over and over again in your post. It was quite clear what you meant.

 

[maximuswarrior]

In a free market economy you can't force people like that. You would have to buy everyone out and then you can run their businesses. That would be a communist system. But communism doesn't work because it fails to account for human nature.

This idea of forcing people to do this or that is the most common idea on this forum and in other Pakistani forums. It's a military or fascist mindset which has taken root in this country. This is not what economic policy is. Economics is creating the right incentives so that people voluntarily do what is best for the country.

Your idea of free market economy sounds good in an economic environment that is healthy and free from strain.

It is not the military that has put the Pak economy in this devastating place. It is your democratically elected leaders who did.

The economy is not healthy. It is also not free from strain.

The people will have to be forced to pay taxes. The people will have to be forced to fulfill their responsibilities. If they don’t their own future is at stake.

 

[S.Y.A]

No you were not. You kept using the word force over and over again in your post. It was quite clear what you meant.

Yes, I used the word force, not take over. doesnt take a genius to understand the difference between the two words. how would the govt force a business to do something? simple: by enforcement of strict rules and regulations. a factory doesnt meet the standards? fine it heavily. importing what is readily available in local market, heavily tax the import.

The IMF route, whether good or bad, is a lengthy route. The fiscal problems aren’t going to be resolved in a few years. It also means more loans, but the real question is whether this is the last installment.

These loans are useless if Pak economy doesn’t recover. These loans are only effective if the government takes tough and unpopular measures to correct course. That means tax collection, lesser imports and lesser useless spending.

on govt's end: will have to shut down many useless govt entities, and will have to abolish useless ministries. things that no govt is wiling to do.

 

[maximuswarrior]

Pakistan needs to think about long term gains , we suffered heavily in 1992 and carried out reforms , earlier loans by IMF were used for short term gains by Pak without major reforms

This is exactly how it is. As long as you keep taking IMF loans without major reforms there won’t be any remedy. IMF loans can only be effective as long as major reforms are initiated. Without major reforms IMF loans are ineffective and a liability.

It is like a patient being treated for illness. If after the treatment the patient continues to on path of self destruction he will end up in a worse state.

 

[S.Y.A]

...and if possible, reduce the extravagant benefits extended to officers of different branches of the govt.

 

[maximuswarrior]

...and if possible, reduce the extravagant benefits extended to officers of different branches of the govt.

Everyone knows EXACTLY what is required. This isn’t rocket science at all. We know why our economy is in such an incredible mess. We created this mess with our own hands. We also fully understand what is required to undo the damage. It means hardship. It means re-educating the masses. It means reforms and restructuring.

Imran Khan needs to navigate the ship from the top. IMF loans were unavoidable. Now we need to see major reforms. Reforms that were promised during election season.

 

[S.Y.A]

Imran Khan needs to navigate the ship from the top. IMF loans were unavoidable. Now we need to see major reforms.

Doesnt look like they have a plan. even if they have one, they are too scared to implement it.

 

[maximuswarrior]

Doesnt look like they have a plan. even if they have one, they are too scared to implement it.

That will be the undoing of PTI and Imran Khan.

There is no easy escape here. As long as structural changes aren’t initiated and lavish expenditure isn’t curbed recovery is impossible. IMF, KSA and China can only save the day so many times.

I am still waiting for a comprehensive plan for collecting tax. I haven’t seen one since the elections ended. When will the government start collecting tax by including everyone in the tax net?

 

[S.Y.A]

That will be the undoing of PTI and Imran Khan.

There is no easy escape here. As long as structural changes aren’t initiated and lavish expenditure isn’t curbed recovery is impossible. IMF, KSA and China can only save the day so many times.

I am still waiting for a comprehensive plan for collecting tax. I haven’t seen one since the elections ended. When will the government start collecting tax by including everyone in the tax net?

this is the problem when one's own allies are the very people who are responsible for this crap. coalition govt in Punjab and centre with allies like pmlq and mqm, and then a number of independents who joined the govt wnt allow any significant changes to be made. plus, the civil service will create hurdles in the way. they are agents of inertia, they will always oppose change, plus, most of them are where they are now thanks to their political masters.

then there are people like shah mahmood qureshi and pervez khattak in the party itself, pervez khttak is notorious for promoting nepotism, and appointing people based on relations. these people want the power to be centered in their hands, they wont allow independent corruption free police and administrative group.

Copied from facebook:
We understand that IMF has asked govt of Pakistan to remove or reduce all subsidies.
We propose to start from top and remove all subsidies provided to the MP, Ministers, CM, MNA and MPA at their lodges and cafeterias and others such as utilities bills free travel by air etc This will help common man understand the upcoming hardships, he will surely feel that he is not the only one who is facing hardship and the government is equally paying its share.

I would like to add generals and judges to this list. and also remove crap like orderly allowances from pensions of grade 20 and above.

 

[Zhukov]

why not ban all imports of goods that can be manufactured here? why not ban import of components/raw material that are available here? why not force the industrialists to raise the quality of their products so that it can be exported? we are an agricultural country and yet we are importing fruits,vegetables, cheese, cream, chocolates etc from abroad. force the chemical and pharma companies to use local raw material, force the raw material producers to maintain quality. force the automotive industry to source as much parts as possible locally, toyota was established in 90's it has been nearly 30 years and they are still importing stuff, whereas when it was established, it was promised by them that they would localize the production.

The Question is not about "Why" its about "how"
and who is this "We" who is going to do all this? i mean banning imports, forcing local industry to do better, forcing local industry to use local raw material etc etc etc.the government Machinery also known as civil servants? Lolz Give me a break. FBR, Police, Revue, Excise, Provincial Bodies they are all big fat joke. as it is common saying Government Servants draw salary for not doing any work and take bribes for doing some work. Yet Public is always outraged at Businessmen and elected members of parliaments. Nobody bothers to look into the real people who actually run this state and their performance.
And the Investors? Taking loans from Banks and Purchasing Plots and Real Estate from it. Not investing anything in risky ventures or R&D. Making same labour intensive low profit SH**** Industries like Textile, Sports wear, Cement. Workin their Employees 6 days a week 8 hours a day non stop wearing them out mentally. And where is commercial farming? any investors keen on investing in commercial farming?
And The Public? They cannot even skip one time Tea, or stop randomly Changing mobile phones every 6 7 months without any reason, or Buying new car every 3 4 years without even need to. i.e on non stop imported shopping spree all of as at every level that we can afford.

Always ask the Question "HOW" and it will always lead to "WE" Sadly
People dont even know what is wrong with their country. Its neither Corruption nor foreign Intervention. Its all about lack of Corporate Ethics, Inefficiency, Lack of Risk taking.

 

[Thəorətic Muslim]

"Capitulating to the IMF will cause massive unemployment warns economist"

The unemployment of workers from noncompetitive industries that are constantly subsidized by the government?

The unemployment of workers from noncompetitive industries that are constantly given loan forgivenesses by the government?

The unemployment of workers or the decline in money for the owners of industries who also happen to sit in Parliament and Assemblies?