IMF sees bleak future for Pakistan and several other states

[GURU DUTT]

May be I was bit harsh but you don't know me to judge me. Anyways, I don't want to give out my credentials to boast myself. But lets just agree to disagree. I disagree to your point that IMF is bent on attenuating your sovereignty. That in my opinion is plain BS.

In any case if you don't like IMF then don't go to them. Its not like IMF is begging you to take their money.

Ouch ...!!!! That must have hurt .

 

[lem34]

I wouldnt worry about what IMF says too much. Their forecasts are often way off the mark

 

[ramu]

I wouldnt worry about what IMF says too much. Their forecasts are often way off the mark

And for example ?

 

[Donatello]

May be I was bit harsh but you don't know me to judge me. Anyways, I don't want to give out my credentials to boast myself. But lets just agree to disagree. I disagree to your point that IMF is bent on attenuating your sovereignty. That in my opinion is plain BS.

In any case if you don't like IMF then don't go to them. Its not like IMF is begging you to take their money.

Your Analysis about IMF is simply flawed. IMF has agreed to provide the Euro bloc with financial assistance....one reason that Wall street showed some big gains yesterday......if you follow the news that is...


Credentials or not, it doesn't take a Phd in Economics to realize that if IMF assistance is used in the right way, it can actually help and most countries in the world take loans all the time.....not to mention Greece, Italy etc.


Pakistan must find a way to channel that IMF money into activities that will generate a greater outcome, like health, education, entrepreneurship, export, energy etc........unless that is done, no matter what country IMF gives loans to....will always remain a beggar state.

To start with, change the crooks living in Aiwan-e-Sadr and Prime Minister Secretariat.

 

[Abu Zolfiqar]

In any case if you don't like IMF then don't go to them. Its not like IMF is begging you to take their money.
[/FONT]

you're right there.

unfortunately our politicians and policy makers dont have our national interests in mind.....


as for IMF, it always has been the least desirable option. Where we are now, we don't need their loan program, our economy is fairly stable and in fact it performed reasonably well (in the sense that we still grew) even during the zenith of the global recession.

major fiscal and other economic reforms are needed, that takes leadership at home.....not an imperialistic, intrusive organization headquartered overseas

 

[BATMAN]

I think this is legitimate reason for Pakistan to review its policy of subsidizing fuel for India's empire buildup in Afghanistan.

Pakistan also need to review the damage to the roads due to heavy traffic due to Indo-Afghan transit aid.

 

[rai_kamal]

IMF predictions are always not accurate,its just a speculation so no need to worry about it..
"Jab hoga tab dekha jayega"

 

[InFn-0]

Just for the sake of knowing... what does the IMF have to say about the debt ridden countries in the euro zone?

 

[bandit]

Just for the sake of knowing... what does the IMF have to say about the debt ridden countries in the euro zone?

Good question. I hope you see everday news coverage of the minutest events and just an IMF report on Pakistan and company here on PDF. ---- Reason? Europe matters to anybody significant in the world economy, the other guys can fall and no one will notice.

 

[SBD-3]

While IMF perdictions may not be true, but they do offer a hint in probable direction, but are these direction proactive or reactive? this is the question.IMF and other institutions usually use scenarios for their predictions. Things may get better but they also gets worse. For example IMF's calculations on Greece and Eurozone have gone horrifically wrong over the current times. EFSF while introduced, was designed for PIG, when Italy and Spain faltered and Bank recapitalization came in picture, this forced the authorities to lever the EFSF (I hop a lot of us would know the concept of leverage) as cash funded EFSF fell short of amount needed for new dynamics. While Pakistan has certainly faced a fragile economic environment but while there are vulnerabilities, no question about it, but the bigger picture has not been that bad (though it could be much better). The shock of aftermath of war on terror still remains in tact. Moreover, the government is in no man's land when it comes to economic policy-making. While working around the point does buy you sometime as policymaker but unless you don't hit the nail, economy never gets back on track. It would sound pretty odd to most of you but if i were asked my opinion about how to correct things, my first choice would be a massive investment in law and order be the first priority. Unless you don't provide your investor with secure environment, he will never invest in your country, be it local or foreign investor, all other things come thereafter (even education with due respect). Another new development which has very serious implication for our external account is the decision of KSA to limit both the number of foreign workers to total workforce ratio (to 20% from 90% currently) and limit on their remittances back home. Last year, 23% of our total remittances came from KSA. let alone discounted by 80% the potential for external hit stand at 18% (this excludes if UAE and other GCC countries also follow the suit). the remittances from US,UK and Europe are already shrinking as economic sluggishness takes its toll on these countries. Its time to build sandbags and fast, both for Pakistan,India and China
Saudi Arabia to put limit on money transfers by foreign workers - Economy - Business - Ahram Online

 

[Nothing]

Day by day KSA and GCC countries are getting tougher for migrant workers ...
Its true that they are losing gr8 amount of money via money transfer by workers to their home counties ...
But these kind of restriction will put south asian countries in trouble .. we are biggest beneficiaries of their money..
We have to start pushing more faster infra growth in under developed regions

 

[SBD-3]

Day by day KSA and GCC countries are getting tougher for migrant workers ...
Its true that they are losing gr8 amount of money via money transfer by workers to their home counties ...
But these kind of restriction will put south asian countries in trouble .. we are biggest beneficiaries of their money..
We have to start pushing more faster infra growth in under developed regions

There is a limit on internal growth....Asian economies have followed "Export led growth" model. But now there is a strong sentiment of protectionism reviving in west (US has recently threatened to promulgate one). Without export growth, Asian giants will no longer remain Asian Giants. And for internal growth, there is a limit, you cant just artificially grow your economy by keep injecting fiat money in it. This is what happened in US and Pakistan in 2005-2008 and is now happening in India (where on every corner you see a bank's ad for financing). Its illogical to achieve 8 or 9 percent growth internally.

 

[Varad]

Pakistan's infra should be in Balochistan, this making it an industry heavy state meant for exports and the eastern part
of the country should be left for agriculture coz of fertile lands of Punjab and Sindh. This balance of agro based as well as
industry based economy can give 7-8% growth easily.

P.S- Of course security and WOT will have to end and peace will have to prevail.

 

[SBD-3]

Pakistan's infra should be in Balochistan, this making it an industry heavy state meant for exports and the eastern part of the country should be left for agriculture coz of fertile lands of Punjab and Sindh. This balance of agro based as well as industry based economy can give 7-8% growth easily.

P.S- Of course security and WOT will have to end and peace will have to prevail.

Here one would have to understand is that 6% or 7% is not the magical figure. There is a concept of potential GDP (the GDP which can be achieved by maximum resource utilization. For example, US's potential GDP growth rate is estimated to be just 3%. Of course an economy may temporarily grow over its potential GDP growth in short run but this can not be sustained in the long run and inflation is the bi product as the GDP reverts back to its potential level (called overheating of the economy). This is what is happening in both China and India and had happened in US before crisis, creation of bubbles that would eventually burst if not taken care of.Moreover, Afghanistan has been growing at even 41% recently, will that mean Afghanistan is the most impressive economy?.
Secondly, merely setting up industrial infrastructure is not enough to make the industry run. Let me give you an example, Government decided to set up textile industry at Kot Addu in 60s or 70s. The area did not have cotton production and the raw materials were to be brought from other parts of the country for production, this spiked the costs and the result was that today hardly one of those units operate. They shifted it to parts of the country where they can have cheaper inputs. So its not a necessary that you can industrialize anything at anywhere.

 

[Varad]

Here one would have to understand is that 6% or 7% is not the magical figure. There is a concept of potential GDP (the GDP which can be achieved by maximum resource utilization. For example, US's potential GDP growth rate is estimated to be just 3%. Of course an economy may temporarily grow over its potential GDP growth in short run but this can not be sustained in the long run and inflation is the bi product as the GDP reverts back to its potential level (called overheating of the economy). This is what is happening in both China and India and had happened in US before crisis, creation of bubbles that would eventually burst if not taken care of.Moreover, Afghanistan has been growing at even 41% recently, will that mean Afghanistan is the most impressive economy?.
Secondly, merely setting up industrial infrastructure is not enough to make the industry run. Let me give you an example, Government decided to set up textile industry at Kot Addu in 60s or 70s. The area did not have cotton production and the raw materials were to be brought from other parts of the country for production, this spiked the costs and the result was that today hardly one of those units operate. They shifted it to parts of the country where they can have cheaper inputs. So its not a necessary that you can industrialize anything at anywhere.

It seems to me you are very pessimistic. What do you suggest then should be Pakistan's approach. You are acting as
a prophet of doom for global economy.

BTW I beleive India's inflation has more to do with supply side whereas China is affected coz of middle income scenario and higher commodities in global market.