the imf is an institution that heaps misery onto nations, it is nothing more than the economic arm of the anglo american empire.
countries need to ween off imf killer programmes and find independence, i read that gadaffi was going to start his own fund that african nations could dip into to replace imf killer loans, no wonder he came to a brutal end, it was a great idea.
For the record Qaddafi’s fall had nothing to do with IMF. Libya being oil rich had FE reserves of more than $70-billion in 2011 at the start of the protests in Libya. Muammar Qaddafi had been in power for 42 years and the opposition to his rule within Libya had been simmering for a long time. Ease with which Ben Ali in the neighbouring Tunisia; in power for 23 years; was overthrown encourage Libyan opposition to start anti Qaddafi protests.
I have read many articles, both pro and anti Qaddafi including the article about African fund. In my view all of this is speculation. Only rational explanation of Qaddafi's fall is probably the oil. If Qaddafi had not been sitting on about 75-billion barrels of oil reserves, it is doubtful that West would have intervened. Let us also not forget that it was the Arab League who formally asked the United Nations to protect civilians that resulted in the UN Security Council Resolution 1973 authorizing limited use of force against the Qaddafi regime.
I see from the posts in this thread that many members don’t have clear understanding of the role of IMF in the world economy. My post did not imply that I don’t like IMF or that IMF is an unnecessary evil. IMF has 188 member countries and its financing comes from the contribution from each of the member country. US is the largest contributor, thus it has the biggest say in the IMF award.
Broadly speaking, any country unable to pay her international bills poses potential problems for the stability of the international financial system which the IMF is supposed to protect. IMF loans are meant to help member countries tackle short term balance of payments problems, stabilize their economies, and restore sustainable economic growth. The crisis prevention role is at the core of IMF lending.
Simultaneously, IMF needs to safeguard that its loan will be repaid , therefore the Bank insists on certain economic reforms to create conditions that IMF experts think would put the country’s economy on right track.
IMF does not finance projects. IMF facility is similar to a temporary over draft from the bank that has to be repaid as agreed and is stopped if the conditions are not met. Nearly 50% of the IMF lending has been to the industrial countries, some of it very successful, thus it would be wrong to blame IMF for the ills of Pakistani economy. The worst that can be said about IMF is that its experts can be wrong and that conditions often only cause suffering without ensuring eventual cure. Some what similar to 'Panadol' reducing the temperature but not really fighting the infection that caused the high temperature.
However, IMF does not voluntarily offer facility, member countries approach IMF for it. Most of the economic problems occur because of over spending (Greece being the prime example). IMF conditions force the governments to reduce spending especially eliminating the subsidies which in turn cause hardship to the common man. Country’ rulers tend to put the blame on the IMF whereas the hardship is always direct result of incompetence of the ruling elite.
In Pakistan’s case everyone knows that circular debt is one of the root causes of power shortage. This is generated thru theft of electricity & non-payment of electric bill by many. However when IMF will insist on raising the electricity prices to balance the book; everyone will blame IMF.
It also is common knowledge that WAPDA, Railways, PIA & the Steel Mill are eating up nearly Rs 400-billion in subsidies. GOP has been printing money to make up the short fall resulting in spiralling inflation and fall in Rupee value. Since the debt repayment is in dollars, more Rupee funds are required for international debt servicing making next year’s budget deficit even greater hence need to print more money. The cycle goes on ad infitim.
Don’t you think that our deficit financing will be drastically reduced if the white elephants listed above are privatised? This will however cause unemployment because thousands would lose their jobs thus increasing misery of the poor.
Nevertheless the demons of circular debt and of subsidies have to be tackled sooner or later if Pakistan economy is to be put on solid foundations as no country, factory, shop or even a family can survive for long if expenditure continuously exceeds income. Refusal of IMF facility would only hasten the inevitable. I would personally rather have it sooner and get it over with.
