IMF bailout package: Pakistan takes the crucial decision

[Shahzaz ud din]

IMF bailout package: Pakistan takes the crucial decision
24 Sep, 2018

ISLAMABAD - Pakistan will not seek IMF bailout package, finance minister Asad Umar has revealed.

He has dispelled the notion that Pakistan will seek International Monetary Fund’s (IMF) assistance.

“Pakistan is not in an emergency situation that requires it to rush to the International Monetary Fund (IMF) to seek a bailout,” he said, adding, “We have neither stopped imports nor imposed financial sanctions.”

He further said, “We need to take well-measured decisions. As a situation emerges, we take steps to manage it. We don’t want to take decisions in an emergency.”

An IMF mission is set to visit Pakistan on September 27. “We are in discussion with them, but this is not to negotiate for a loan. Our purpose is to do our homework, in case we want to approach them at some stage,” the finance minister commented.

Responding to a question about managing the balance of payment deficit, Umar said, “We are eliminating the root cause of this problem, and that root cause is the fiscal deficit. We have done that through the recent finance bill which will reduce our cost of import.”

 

[baapu]

Responding to a question about managing the balance of payment deficit, Umar said, “We are eliminating the root cause of this problem, and that root cause is the fiscal deficit. ”

Sorry , this is like saying " root cause of the hole is that there is dirt missing from the ground."

 

[maximuswarrior]

This is excellent news.

 

[wali87]

So we don’t need it yet we are meeting with them in case we need the loan in the future? Either mr Asad is stupid or he thinks that the people are naive. I mean we just got 10billion in charity from the Saudis for gods sake. Then we are begging the nation to fund a dam, which btw in my opinion is extremely irrational. Pathetic. Khan needs to do something out of the box else he too will be remembered as just another PM who talked a lot and didn’t manage anything in the end.

 

[rAli]

He said earlier that we have to make decision in 5 to 6 weeks after taking offices. The way I see it if we can manage 6 month without going to IMF, positives from this government will start to emerge.
Secondly, Saudi must have given accurances for FDI.

 

[Dil Pakistan]

Pakistan approaching IMF for funding was one source of hope for US to squeeze Pakistan's balls.

Not going to IMF will make US more desperate.

Lagta hey KSA ka dora ziyada hi kamyab ho gaya hey

 

[Pan-Islamic-Pakistan]

Naya Pakistan Zindabad.

Purana Bharat Murdabad.

 

[Fawadqasim1]

Good news

 

[Imad.Khan]

So we don’t need it yet we are meeting with them in case we need the loan in the future? Either mr Asad is stupid or he thinks that the people are naive. I mean we just got 10billion in charity from the Saudis for gods sake. Then we are begging the nation to fund a dam, which btw in my opinion is extremely irrational. Pathetic. Khan needs to do something out of the box else he too will be remembered as just another PM who talked a lot and didn’t manage anything in the end.

Its called a contingency plan, if a situation arises that Pakistan needs a bailout from IMF then atleast the ground work is already completed. As for the dam project, i fail to understand how asking your own countrymen to help fund it is extremely irrational, do you prefer that Pakistan should always take loans for every project? Plus how come asking the nation for donation instead of going to IMF/World Bank doesn't equate to out of the box thinking for you?

 

[FuturePAF]

Meeting with the IMF to find out what restrictions they would have imposed if a Loan was given are good things to know. when you start to tax people, you can point to what the alternative to collecting taxes are. line by line, the austerity measures Pakistanis would have to live under would be harsher then just paying taxes. Regular Pakistani people need to see what the actual costs of a product or service are so they can decide if they can afford it. If the government subsidizes farmers that use old irrigation techniques and produce low value crops, then the farmers should bare the actual market rate costs. Importing Luxury items should come with heavy tariffs. Government works need to be managed well or their bosses need to be fired. If the bosses are honest and organized, but some workers are incompetent or under performing, they should be let go. National Productivity needs to be increased. Going to the IMF and getting a loan would shift human development to just paying off loans and no immediate benefits to regular people.

Simple solution, pay your taxes and pay a fair amount for any service or product given by the government or go without. Once reforms are enacted, investors will come in and employ more people, and we should have to go to the IMF ever again.

 

[ziaulislam]

Sorry , this is like saying " root cause of the hole is that there is dirt missing from the ground."

he is right here..govt is spending way much than there is money causing runway imports

However, it has to spend to spurn growth

Govt has to focus on decreasing imports and increasing exports..for starters how come an agricultural countries importing oil, pulses and dry milk..shouldn't happen

 

[Hakikat ve Hikmet]

Looks like the Pak Finance Minster is thinking like well crafted and extremely astute generals who basically win you wars with their superb strategies!!!!

On a serious note, it looks to like the following in conjunction to the fast changing geo-political/strategic conditions:

• The era of the multiple Great Powers is coming back for a change as the folks have got fed up with the below par intelligence from WH/Pentagon etc.
• Folks are trying to behave from a science of growing beyond the weed smoking NYC bankers.
• Pak PM's visit to the KSA indeed to be meant serious.
• Pak Chief was there to meet the Chinese President to re-haul and re-boot the relationship for the next level of challenges from financial, economic, trade, investment, strategic etc.
• Pak Deep State and Deep Nation are forging ahead with a grand and aligned vision.

 

[LeGenD]

Very simple: KSA came to our rescue.

 

[FuturePAF]

he is right here..govt is spending way much than there is money causing runway imports

However, it has to spend to spurn growth

Govt has to focus on decreasing imports and increasing exports..for starters how come an agricultural countries importing oil, pulses and dry milk..shouldn't happen

Imports need to be audited and where possible switching to local alternatives for a few years should be encouraged. Importing to Modernize Agriculture, stabilize water & electricity supplies, and improve efficiencies/productivity in industrial process and services will be short terms burdens to generate long term economic stability. To pay for the gap, taxes on consumers and producers need to be imposed, so they are forced to invest to consume responsibly. Government should find ways to educate the public on how to conserve, reuse, and recycle, as well as become more efficient with what they use.

 

[wali87]

Its called a contingency plan, if a situation arises that Pakistan needs a bailout from IMF then atleast the ground work is already completed. As for the dam project, i fail to understand how asking your own countrymen to help fund it is extremely irrational, do you prefer that Pakistan should always take loans for every project? Plus how come asking the nation for donation instead of going to IMF/World Bank doesn't equate to out of the box thinking for you?

So first of all whatever happened to the talk about not taking loans? Now it seems everything is justifyable one way or the other. Just because your in power. Secondly asking your countrymen to fund a project of this magnitute may sound poetic but its absolutely absurd and ibstand by it. Thats because its peanuts. We need around 16 billion dollars. Check the fund status and do the math. Its one the largest dams in the region not some gali ka transformer. Such projects are financed by the goverment budget with tax money. I pay approx 50 million ruppees in tax annually, yet i have to pay another 1000 dollars for dam charity. What a joke. The people have changed, the game seeems to be the same.