Star Wars
BANNED
- Joined
- Jan 7, 2013
- Messages
- 12,446
- Reaction score
- -14
- Country
- Location
This is not intended troll in anyway, but to find out if the IMF is doing the same thing to Pakistan it did to Yugoslavia ?
I was reading up the article on Wikipedia about the Yugoslavian economy and could not notice similarity to the situation in Pakistan..
http://en.wikipedia.org/wiki/Economy_of_the_Socialist_Federal_Republic_of_Yugoslavia
the following below is an article from wiki
Collapse of the Yugoslav economy
Year Debt Inflation
1954[20] $400 million
1974[21] 20%
1980[22] 27%
1982[23] $16.9 billion
1988[24] $21 billion 217%
Yugoslavia was once a regional industrial power and economic success.[citation needed] In 1960, annual gross domestic product (GDP) growth averaged 6.1 percent, health care was free, literacy was 91 percent, and life expectancy was 72 years.[25]
The collapse of the Yugoslav economy was partially caused by its non-aligned stance that had resulted in access to loans from both superpower blocs[citation needed]. This contact with the United States and the West opened up Yugoslav markets sooner than in the rest of Central and Eastern Europe. Despite Belgrade's non-alignment stance and its extensive trading relations with the European Community and the U.S., the Reagan administration targeted the Yugoslav economy in a 1984 National Security Decision Directive (NSDD 133) classified as Secret Sensitive, titled U.S. Policy towards Yugoslavia. A censored version declassified in 1990 elaborated on NSDD 54 issued in 1982 which dealt with Eastern Europe. The latter advocated "expanded efforts to promote a 'quiet revolution' to overthrow Communist governments and parties," while reintegrating the countries of Eastern Europe into a market-oriented economy.[26]
Western trade barriers dramatically reduced Yugoslavia's economic growth[citation needed]. In order to counter this, Yugoslavia took on a number of International Monetary Fund (IMF) loans and subsequently fell into heavy debt. As a condition of receiving loans, the IMF demanded "market liberalisation" of Yugoslavia. By 1981, Yugoslavia had incurred $19.9 billion in foreign debt.[citation needed] However, Yugoslavia’s real concern was unemployment, which stood at 1 million by 1980[citation needed]. Real earnings in Yugoslavia fell by 25% from 1979 to 1985.[16] By 1988 emigrant remittances to Yugoslavia totalled over $4.5 billion (USD), and by 1989 remittances were $6.2 billion (USD), which amounted to over 19% of the world's total.[27][28]
In 1989, before the fall of the Berlin Wall, Yugoslav federal Prime Minister Ante Marković went to Washington to meet with President George H. W. Bush, to negotiate a new financial aid package. In return for assistance, Yugoslavia agreed to even more sweeping economic reforms, which included a new devalued currency, another wage freeze, sharp cuts in government spending, and the elimination of socially owned, worker-managed companies.[29] The Belgrade nomenclature, with the assistance of western advisers, had laid the groundwork for Marković's mission by implementing beforehand many of the required reforms, including a major liberalization of foreign investment legislation.
This was in part muted by the spectacular draining of the banking system, caused by the rising inflation, in which millions of people were effectively forgiven debts or even allowed to make fortunes on perfectly legal bank-milking schemes[citation needed]. The banks adjusted their interest rates to the inflation, but this could not be applied to loan contracts made earlier which stipulated fixed interest rates. Debt repayments for privately owned housing, which was massively built during the prosperous 1970s, became ridiculously small and as a result banks suffered huge losses. Indexation was introduced to take inflation into account, but the resourceful population continued to drain the system through other schemes, many of them having to do with personal cheques.
Personal cheques were widely used in Yugoslavia in pre-inflation times. Cheques, which were considered legal tender, were accepted by all businesses. They were processed by hand and mailed by regular post, so there was no way to ensure real-time accounting. The banks therefore continued to deduct money from current accounts on the date they received the cheque, and not on the date it was issued. When inflation rose to triple and then quadruple digits, this allowed another widespread form of cost reduction or outright milking of the system. Bills from remote places would arrive six months late, causing losses to businesses. Since banks maintained no-fee mutual customer service, people would travel to small banks in rural areas on the other end of the country and cash in several cheques. They would then exchange the money for foreign currency, usually German mark and wait for the cheque to arrive. They would then convert a part of the foreign currency amount and repay their debt, greatly reduced by inflation. Companies, struggling to pay their work-force, adopted similar tactics.
A 2,000,000 dinar bill was introduced in 1989 as a result of the hyperinflation.
New legislation was gradually introduced to remedy the situation, but the government mostly tried to fight the crisis by issuing more currency, which only fuelled the inflation further. In the late 1980s, the state of the economy was commonly considered a joke.[citation needed] Power-mongering in big industrial companies led to several large bankruptcies (mostly of large factories), which only increased the public perception that the economy is in a deep crisis. After several failed attempts to fight the inflation with various schemes, the government of Branko Mikulić was replaced by a new government in March 1989, headed by Ante Marković, a pragmatic reformist. He spent a year introducing new business legislation, which quietly dropped most of the associated labour theory and introduced private ownership of businesses. While public companies were allowed to be partially privatised, mostly through investment, the concepts of social ownership and worker councils were still retained.
On New Year's Eve 1989, Ante Marković introduced his program of economic reforms. Ten thousand Dinars became one "New Dinar", pegged to the German Mark at the rate of 7 New Dinars for one Mark. The sudden end of inflation brought some relief to the banking system. Ownership and exchange of foreign currency was deregulated which, combined with a realistic exchange rate, attracted foreign currency to the banks. However, by the late 1980s, it was becoming increasingly clear that the federal government was effectively losing the power to implement its programme.
[edit]Early 1990s and the outbreak of civil war
In the 1990s, IMF effectively controlled the Yugoslav central bank. Its tight money policy further crippled the country's ability to finance its economic and social programs. State revenues that should have gone as transfer payments to the republics and provinces went instead to service Belgrade's debt to the Paris Club and London Club. The republics were left on their own to survive. From 1989 through September 1990, more than a thousand companies went into bankruptcy. By 1990 annual GDP growth rate had shrunk to –7.5 percent. In 1991, GDP declined by a further 15 percent, while industrial output shrank by 21 percent.[30]
The reforms demanded by Belgrade's creditors struck at the core of Yugoslavia's system of socially owned and worker-managed enterprises. The objective of the reforms was to privatize Yugoslav economy and to dismantle the public sector. Instead of rebuffing the reforms, Yugoslavia was desperate and could not refuse their demands. With external pressure by the West, Marković's government passed financial legislation that forced "insolvent" businesses into bankruptcy or liquidation. According to the new law, if a business was unable to pay its bills for 30 days running, or for 30 days within a 45-day period, the government would launch bankruptcy proceedings within the next 15 days.
The reforms on the socialist economy also included a new banking law designed to trigger the liquidation of the socially owned Yugoslav Bank for International Economic Cooperation (YBIEC). Within two years, more than half of the country's banks had vanished, to be replaced by newly formed independent profit-oriented institutions. The IMF package precipitated the collapse of much of Yugoslavia's well-developed heavy industry. Other socially owned enterprises survived only by not paying workers. More than half a million workers still on company payrolls did not get regular salaries in late 1990. Some 600,000 Yugoslavs had already lost their jobs by September 1990, but that was only the beginning. According to the World Bank, another 2,435 industrial enterprises, including some of the country's largest, were slated for liquidation. Their 1.3 million workers, half of the remaining industrial workforce, were deemed "redundant".[31] As 1991 dawned, real wages were in free fall, social programs had collapsed, and unemployment rate rose dramatically.
Quoted from London's Financial Times:
“ The dismantling of the industrial economy was breathtaking in its magnitude and brutality. Its social and political impact, while not as easily quantified, was tremendous. The pips are squeaking,[32] ”
Yugoslav President Borisav Jović warned:
“ The reforms were having a markedly unfavourable impact on the overall situation in society.... Citizens have lost faith in the state and its institutions.... The further deepening of the economic crisis and the growth of social tensions has had a vital impact on the deterioration of the political-security situation.[33] ”
Governments of individual republics refused to pay federal taxes or enforce federal import fees (border police and customs services were under the jurisdiction of republics), and the government of Serbia even managed to use the federal money printing facility in Belgrade to issue itself a short-term credit. The federal government was forced to raise the exchange rate for the German Mark first to 9 and then to 13 dinars. The economic struggle also heightened already tense relations among the republics and between the republics and Belgrade.
In June 1991 Marković, who had formed his own Union of Reform Forces political party, led the last-ditch attempt to save the federation through negotiations over federal income from customs offices in SR Slovenia, which was withholding the money. But at the same time, Slovenia joined other republics in challenging the federal government's efforts to restrict their economic autonomy. Both Croatian leader Franjo Tuđman and Serbia's Slobodan Milošević joined Slovene leaders in railing against Yugoslavia's attempts to impose harsh reforms.[34]
In the 1990 multi-party elections, economic policy was at the centre of the political debate as separatist coalitions ousted the communists in SR Croatia, SR Bosnia and Herzegovina, and Slovenia. Just as economic collapse spurred the drift toward separation, separation in turn exacerbated the economic crisis. Cooperation among the republics virtually ceased and, with one being at another's throat, both the economy and the nation itself embarked on a vicious downward spiral. The process sped along as the republican leadership, deliberately fostered social and economic divisions to strengthen their own hands.
“ The republican oligarchies, who all had visions of a national renaissance of their own, instead of choosing between a genuine Yugoslav market and hyperinflation, opted for war which would disguise the real causes of the economic catastrophe.[35] ”
The simultaneous appearance of militias loyal to secessionist leaders only hastened the descent into chaos. These militias, with their escalating atrocities, not only split the population along ethnic lines, they also fragmented the workers' movement. Slovenia, Croatia, and finally, Bosnia fought bloody civil wars against rump Yugoslavia (Serbia and Montenegro) or Serbian nationalists or both. But now, the U.S. has belatedly taken an active diplomatic role in Bosnia, strengthened its relations with Croatia and Macedonia, and positioned itself to play a leading role in the region's economic and political future.
-----------------------
or am i shooting at the dark here ?
I was reading up the article on Wikipedia about the Yugoslavian economy and could not notice similarity to the situation in Pakistan..
http://en.wikipedia.org/wiki/Economy_of_the_Socialist_Federal_Republic_of_Yugoslavia
the following below is an article from wiki
Collapse of the Yugoslav economy
Year Debt Inflation
1954[20] $400 million
1974[21] 20%
1980[22] 27%
1982[23] $16.9 billion
1988[24] $21 billion 217%
Yugoslavia was once a regional industrial power and economic success.[citation needed] In 1960, annual gross domestic product (GDP) growth averaged 6.1 percent, health care was free, literacy was 91 percent, and life expectancy was 72 years.[25]
The collapse of the Yugoslav economy was partially caused by its non-aligned stance that had resulted in access to loans from both superpower blocs[citation needed]. This contact with the United States and the West opened up Yugoslav markets sooner than in the rest of Central and Eastern Europe. Despite Belgrade's non-alignment stance and its extensive trading relations with the European Community and the U.S., the Reagan administration targeted the Yugoslav economy in a 1984 National Security Decision Directive (NSDD 133) classified as Secret Sensitive, titled U.S. Policy towards Yugoslavia. A censored version declassified in 1990 elaborated on NSDD 54 issued in 1982 which dealt with Eastern Europe. The latter advocated "expanded efforts to promote a 'quiet revolution' to overthrow Communist governments and parties," while reintegrating the countries of Eastern Europe into a market-oriented economy.[26]
Western trade barriers dramatically reduced Yugoslavia's economic growth[citation needed]. In order to counter this, Yugoslavia took on a number of International Monetary Fund (IMF) loans and subsequently fell into heavy debt. As a condition of receiving loans, the IMF demanded "market liberalisation" of Yugoslavia. By 1981, Yugoslavia had incurred $19.9 billion in foreign debt.[citation needed] However, Yugoslavia’s real concern was unemployment, which stood at 1 million by 1980[citation needed]. Real earnings in Yugoslavia fell by 25% from 1979 to 1985.[16] By 1988 emigrant remittances to Yugoslavia totalled over $4.5 billion (USD), and by 1989 remittances were $6.2 billion (USD), which amounted to over 19% of the world's total.[27][28]
In 1989, before the fall of the Berlin Wall, Yugoslav federal Prime Minister Ante Marković went to Washington to meet with President George H. W. Bush, to negotiate a new financial aid package. In return for assistance, Yugoslavia agreed to even more sweeping economic reforms, which included a new devalued currency, another wage freeze, sharp cuts in government spending, and the elimination of socially owned, worker-managed companies.[29] The Belgrade nomenclature, with the assistance of western advisers, had laid the groundwork for Marković's mission by implementing beforehand many of the required reforms, including a major liberalization of foreign investment legislation.
This was in part muted by the spectacular draining of the banking system, caused by the rising inflation, in which millions of people were effectively forgiven debts or even allowed to make fortunes on perfectly legal bank-milking schemes[citation needed]. The banks adjusted their interest rates to the inflation, but this could not be applied to loan contracts made earlier which stipulated fixed interest rates. Debt repayments for privately owned housing, which was massively built during the prosperous 1970s, became ridiculously small and as a result banks suffered huge losses. Indexation was introduced to take inflation into account, but the resourceful population continued to drain the system through other schemes, many of them having to do with personal cheques.
Personal cheques were widely used in Yugoslavia in pre-inflation times. Cheques, which were considered legal tender, were accepted by all businesses. They were processed by hand and mailed by regular post, so there was no way to ensure real-time accounting. The banks therefore continued to deduct money from current accounts on the date they received the cheque, and not on the date it was issued. When inflation rose to triple and then quadruple digits, this allowed another widespread form of cost reduction or outright milking of the system. Bills from remote places would arrive six months late, causing losses to businesses. Since banks maintained no-fee mutual customer service, people would travel to small banks in rural areas on the other end of the country and cash in several cheques. They would then exchange the money for foreign currency, usually German mark and wait for the cheque to arrive. They would then convert a part of the foreign currency amount and repay their debt, greatly reduced by inflation. Companies, struggling to pay their work-force, adopted similar tactics.
A 2,000,000 dinar bill was introduced in 1989 as a result of the hyperinflation.
New legislation was gradually introduced to remedy the situation, but the government mostly tried to fight the crisis by issuing more currency, which only fuelled the inflation further. In the late 1980s, the state of the economy was commonly considered a joke.[citation needed] Power-mongering in big industrial companies led to several large bankruptcies (mostly of large factories), which only increased the public perception that the economy is in a deep crisis. After several failed attempts to fight the inflation with various schemes, the government of Branko Mikulić was replaced by a new government in March 1989, headed by Ante Marković, a pragmatic reformist. He spent a year introducing new business legislation, which quietly dropped most of the associated labour theory and introduced private ownership of businesses. While public companies were allowed to be partially privatised, mostly through investment, the concepts of social ownership and worker councils were still retained.
On New Year's Eve 1989, Ante Marković introduced his program of economic reforms. Ten thousand Dinars became one "New Dinar", pegged to the German Mark at the rate of 7 New Dinars for one Mark. The sudden end of inflation brought some relief to the banking system. Ownership and exchange of foreign currency was deregulated which, combined with a realistic exchange rate, attracted foreign currency to the banks. However, by the late 1980s, it was becoming increasingly clear that the federal government was effectively losing the power to implement its programme.
[edit]Early 1990s and the outbreak of civil war
In the 1990s, IMF effectively controlled the Yugoslav central bank. Its tight money policy further crippled the country's ability to finance its economic and social programs. State revenues that should have gone as transfer payments to the republics and provinces went instead to service Belgrade's debt to the Paris Club and London Club. The republics were left on their own to survive. From 1989 through September 1990, more than a thousand companies went into bankruptcy. By 1990 annual GDP growth rate had shrunk to –7.5 percent. In 1991, GDP declined by a further 15 percent, while industrial output shrank by 21 percent.[30]
The reforms demanded by Belgrade's creditors struck at the core of Yugoslavia's system of socially owned and worker-managed enterprises. The objective of the reforms was to privatize Yugoslav economy and to dismantle the public sector. Instead of rebuffing the reforms, Yugoslavia was desperate and could not refuse their demands. With external pressure by the West, Marković's government passed financial legislation that forced "insolvent" businesses into bankruptcy or liquidation. According to the new law, if a business was unable to pay its bills for 30 days running, or for 30 days within a 45-day period, the government would launch bankruptcy proceedings within the next 15 days.
The reforms on the socialist economy also included a new banking law designed to trigger the liquidation of the socially owned Yugoslav Bank for International Economic Cooperation (YBIEC). Within two years, more than half of the country's banks had vanished, to be replaced by newly formed independent profit-oriented institutions. The IMF package precipitated the collapse of much of Yugoslavia's well-developed heavy industry. Other socially owned enterprises survived only by not paying workers. More than half a million workers still on company payrolls did not get regular salaries in late 1990. Some 600,000 Yugoslavs had already lost their jobs by September 1990, but that was only the beginning. According to the World Bank, another 2,435 industrial enterprises, including some of the country's largest, were slated for liquidation. Their 1.3 million workers, half of the remaining industrial workforce, were deemed "redundant".[31] As 1991 dawned, real wages were in free fall, social programs had collapsed, and unemployment rate rose dramatically.
Quoted from London's Financial Times:
“ The dismantling of the industrial economy was breathtaking in its magnitude and brutality. Its social and political impact, while not as easily quantified, was tremendous. The pips are squeaking,[32] ”
Yugoslav President Borisav Jović warned:
“ The reforms were having a markedly unfavourable impact on the overall situation in society.... Citizens have lost faith in the state and its institutions.... The further deepening of the economic crisis and the growth of social tensions has had a vital impact on the deterioration of the political-security situation.[33] ”
Governments of individual republics refused to pay federal taxes or enforce federal import fees (border police and customs services were under the jurisdiction of republics), and the government of Serbia even managed to use the federal money printing facility in Belgrade to issue itself a short-term credit. The federal government was forced to raise the exchange rate for the German Mark first to 9 and then to 13 dinars. The economic struggle also heightened already tense relations among the republics and between the republics and Belgrade.
In June 1991 Marković, who had formed his own Union of Reform Forces political party, led the last-ditch attempt to save the federation through negotiations over federal income from customs offices in SR Slovenia, which was withholding the money. But at the same time, Slovenia joined other republics in challenging the federal government's efforts to restrict their economic autonomy. Both Croatian leader Franjo Tuđman and Serbia's Slobodan Milošević joined Slovene leaders in railing against Yugoslavia's attempts to impose harsh reforms.[34]
In the 1990 multi-party elections, economic policy was at the centre of the political debate as separatist coalitions ousted the communists in SR Croatia, SR Bosnia and Herzegovina, and Slovenia. Just as economic collapse spurred the drift toward separation, separation in turn exacerbated the economic crisis. Cooperation among the republics virtually ceased and, with one being at another's throat, both the economy and the nation itself embarked on a vicious downward spiral. The process sped along as the republican leadership, deliberately fostered social and economic divisions to strengthen their own hands.
“ The republican oligarchies, who all had visions of a national renaissance of their own, instead of choosing between a genuine Yugoslav market and hyperinflation, opted for war which would disguise the real causes of the economic catastrophe.[35] ”
The simultaneous appearance of militias loyal to secessionist leaders only hastened the descent into chaos. These militias, with their escalating atrocities, not only split the population along ethnic lines, they also fragmented the workers' movement. Slovenia, Croatia, and finally, Bosnia fought bloody civil wars against rump Yugoslavia (Serbia and Montenegro) or Serbian nationalists or both. But now, the U.S. has belatedly taken an active diplomatic role in Bosnia, strengthened its relations with Croatia and Macedonia, and positioned itself to play a leading role in the region's economic and political future.
-----------------------
or am i shooting at the dark here ?
Yes Totally Agree 
Kindly dont worry about us we take care of ourself
i was trying to say what ever happening to PAKISTAN would have happen to INDIA then for sure their economy would have Gone Down Tooooooooooooooooooo 
