IMF starts Dictating terms to Pakistan.... Cut Army

[metalfalcon]

THE International Monetary Fund yesterday ordered Pakistan to cut military spending by almost a third as fears grew that the nuclear-armed nation's economic crisis was now so bad that its role in the war against al-Qa'ida and the Taliban was imperilled.

The secret IMF demand - one of several measures that the bankrupt country is being asked to agree to for a bailout of its tanking economy - was disclosed as President Asif Ali Zardari prepared to go cap in hand to Saudi Arabia for help.

Also yesterday, it was announced that US General David Petraeus would travel to Islamabad next week for talks.

Amid reports that General Petraeus was planning the same strategy for Pakistan and Afghanistan that he used in Iraq, it emerged that the boss of Islamabad's spy agency, the ISI, General Ahmed Shuja Pasha, was in Washington to mend fences over his organisation's double-dealing with the militants.

A senior military source in Islamabad told The Weekend Australian last night: "A cut to military spending of anything like that magnitude - even 10per cent, let alone the more than 30per cent that is being demanded - would rip the heart out of the army and its ability to operate effectively in a situation where it is in the front line of the battle against al-Qa'ida and the Taliban ... If we go, al-Qa'ida wins. Is that what the IMF wants to see?"

The country is now rated as among the worst credit risks in the world, ahead of only the Indian Ocean Seychelles islands in the Standard & Poor's index.

The military pay cut is just a part of IMF demands.

What was being sought in exchange for a bailout was effectively what had been termed "economic martial law". Six IMF directors and two World Bank directors would oversee all preparations for the country's budget, and would have direct intervention in the running of the State Bank of Pakistan.

IMF officials would also be imposed even at the provincial level to monitor tax collection.

The number of pensionable government jobs could be cut by almost half. After agreeing to the conditions, Pakistan would get $US9.6billion ($14.5billion) from the IMF over three years.

Last night, Mr Zardari asked where money given to Pakistan since September 11, including a handout of $US10billion from the US to be used in the war against terrorism, had gone.

"We could have averted the present difficult economic situation if tens of billions of dollars received in assistance and foreign remittances during the past several years after 9/11 had been wisely spent on infrastructure development instead of importing consumer goods," he said.

He might have found his answer in newspaper reports yesterday that a cabinet reshuffle remained stalled as would-be ministers from rival coalition parties wrangled over who would get the most lucrative posts.

A leading Karachi banker warned "without external assistance, Pakistan doesn't have the resources to meet its obligations," and added: "Pakistan should seek the IMF's assistance now instead of waiting for the eleventh hour. It is already 10:55."

Cricketer-turned-politician Imran Khan said the country was facing an economic crisis of a magnitude never seen before. "Unless we change, we are heading towards a disaster. The only way we can change is if we have an independent judiciary checking the abuse of power," he said.

IMF tells Pakistan to cut army | The Australian

 

[metalfalcon]

I Hope they don't get any loan from IMF, it will screw Pakistanis even more

 

[Black Stone]

I Hope they don't get any loan from IMF, it will screw Pakistanis even more

If they don't get it from the IMF, where do you suppose they should get the desperate needed funds from?.

 

[UnitedPak]

If they don't get it from the IMF, where do you suppose they should get the desperate needed funds from?.

Chaudrys

 

[asaad-ul-islam]

frankly, I think we should all suffer for letting these retards back into power. army and awam, they all should suffer the consequences. I have no hope for the country anymore. to think that we were actually going somewhere thanks to Musharraf's visionary outlook. now we have reverted back to the 90's.

Pakistan is nominated as Rising Star in the field of science and engineering ​

Friday, 26 September 2008

International publishing house conducted an international survey & rate Pakistan as "Rising Star". Thomson Reuters in its publication Science Watch categorized Pakistan as "Rising Star" in the field of science and engineering.

They listed Pakistan in top 12 countries of the world which increased in the citations and publications.

They recognized the efforts of Higher Education Commission in Pakistan. Pakistan got "Rising Star" status in so many fields due to extraordinary progress in the higher education during the last 6 years resulting in the increase of publications and citations by universities and research centers.

In a short period of six years Higher Education Commission has sent 25,000 scholars for PhD studies to different universities worldwide which brought about 400 percent increase in research output. HEC has launched free digital library to provide access to 45000 books, research monographs and 23,000 international journals.

These achievements has been reported by USIAD report and world's top science journal-Nature in an editorial published on August 28.

Prof. Dr Atta-ur-Rehman played an important role in establishing HEC. He is acting as chairman of HEC. He is one of the leading scientist in Pakistan who brought the revolution in the field of science and technology in Pakistan. He has over 644 publications, 93 books of which 59 chapters in books published by European countries. He is Editor-in-Chief/Executive Editor of fifteen leading European chemistry journals. He is the director of H.E.J. Research Institute of Chemistry, Karachi University. This department won the international projects of 35 million US dollars under his guidance. He has got 4 civil awards from Govt. of Pakistan. He has secured UNESCO science prize and many other international awards.

 

[AgNoStiC MuSliM]

Tareen has denied such cuts would take place, and quite frankly I do not see any government making those cuts at at a time when the military is needed more than ever to fight the insurgency.

Cutting defense spending as is alleged to have been demanded could in fact increase instability, because if you start reducing the size of the Army (which is where the majority of the cuts would take place) this drastically in the middle of an economic slowdown, these people are potentially not going to get employed right away, and will suffer severe economic and social pressures.

Such a move could end up creating a scenario similar to the the disbanding of the Iraqi Army, where you have well trained ex-soldiers being recruited by the Taliban etc.

I think a continued freeze (adjusted for inflation) in the Defense budget for the next couple of years, such as we saw in the 2008 budget, is what we will likely see happen. Typicaly IMF conditions have more to do with the size of the budget deficit, tax policies (broadening the tax net - agriculture, services etc.), and a reduction in government borrowing.

The budget deficit has already been brought down by about 2 percentage points (GoP figures) by reducing subsidies and cutting expenses, including the defense freeze. SO theoretically the GoP has already met some of the conditions the IMF woudl typically demand.

Specifically demanding a cut in the defense budget, rather than focusing on the overall budget deficit, indicates micromanaging Pakistan's budget with malicious intent, and those orders woudl only be coming from Washington. Lets wait and see if this condition is in fact articulated after all the negotiations are done and over.

 

[BATMAN]

If they don't get it from the IMF, where do you suppose they should get the desperate needed funds from?.

You shouldn't be worried for that!

 

[DudeAl]

Under the present circumstances they really have no other choice left.friends of Pakistan won't give us ****.I agree with what the gentleman said there ..this is what the people deserve because what they asked for.Those retards who came out on the streets last year and made heroes out of the 3rd most corrupt institution in the country and those religious bigots who showed sympathy for the lal masjid terrorists welll they got their wish.

 

[Black Stone]

I have no hope for the country anymore.

This is a suprise, never seen a Pakistani member write that.

 

[Black Stone]

You shouldn't be worried for that!

Brucey, I wasn't worried at all. I am just curious to know where you could get the much needed funds if not getting it from the IMF as your fellow brother suggested.

 

[Neo]

Pakistan rules out reduction in defence spending for IMF loan ​

ISLAMABAD: Pakistan’s Defence Minister Ahmad Mukhtar has ruled out any major cut in the defence budget, explaining that the defence sector was already facing a financial crunch because of the devaluation of Pakistani rupee against the American dollar.

In an interview yesterday Mukhtar said Pakistan had yet to apply for the International Monetary Fund bailout package which, he reiterated, would be the last option for the government to avail.

When asked about the IMF’s reported condition for a 30% cut in defence budget, he did not think such a major slashing in defence spending would be possible.

He said already the government was contemplating upgrading its defence forces, which would only be possible with added resources.

Right now, he said, the defence forces were facing financial constraints because of the massive devaluation of the rupee against the US dollar.
He termed the IMF’s condition mere hearsay at this stage and insisted Pakistan had not even applied for the fund’s assistance.

An IMF document reported in Pakistani media earlier this week sets the cut of 30% in the country’s defence budget between 2009 and 2013 as one of the major conditions for the provision of required assistance to Pakistan.
Mukhtar said the government would knock the doors of the IMF once all other options were exhausted. For the current fiscal year, Pakistan had increased defence spending by nearly 7% to Rs296bn.

In the preceding year that ended on June 30, Pakistan spent Rs277bn on defence. However, even Prime Minister Yousuf Raza Gilani had admitted that the budget for defence had gone down in real terms because of inflation and in dollar terms.

In June 2008 when the Rs296bn budget was presented, it was equivalent to almost $4.4bn.

However, today with a massive devaluation of the Pakistani rupee, the defence budget for the current year in dollar terms has already reduced to $3.6bn. — Internews

 

[kingfisher99]

PM: We will help Pak get aid from IMF
10/26/2008 12:28:06 PM
Prime Minister Manmohan Singh to help Pak avail help from IMF (file photo)

In what could be seen as a major confidence building measure, India has said it will support Pakistan government's efforts to tide over a serious financial crunch by backing Islamabad's plan to seek help from the IMF.

"I wish the new democratic government in Pakistan well. We would like them to succeed," Prime Minister Manmohan Singh told reporters on board his special aircraft while returning home from a two-nation trip to Japan and China last evening.

"Pakistan is in serious difficulties and is going to the IMF. We will support Pakistan getting help from the IMF," said Singh, who met his Pakistani counterpart Yousuf Raza Gilani in Beijing on the margins of the ASEM Summit on Friday.

Singh said he and Gilani discussed "all issues having a bearing on our bilateral relations and I would say that there was a near complete meeting of mind."

The Prime Minister's remarks came as Pakistan is facing a major economic crisis with plunging foreign exchange reserves and high inflation. The rating agency Standard and Poor's downgraded the country's sovereign debt to level of 'CCC-plus', close to defaulting on its commitments of external loan repayment.

Islamabad is seeking loans from international donor funds and member states of 'Friends of Pakistan' group, which will convene a meeting next month in the UAE. The Prime Minister said he had extensive discussions with Gilani on trade.

"We expressed happiness at the opening of the trade route in Jammu and Kashmir. We expressed our wish that trade should be expanded and discussed the problem of visa liberalisation and people-to-people contact," Singh said.

He said Gilani briefed him about the discussions on terrorism in Pakistan's Parliament. Singh noted that Pakistan's Parliament had for the first time passed a strong resolution against terrorism that said Pakistani territories would not be allowed to be utilised for terrorist activities against neighbours.

"It was a good meeting but we are yet to see how effectively it is implemented...," Singh said.
www.timesnow.com::)

 

[kingfisher99]

tighter expenditure reducing wasteful unwarrented expenses.but the best solution instead of taking loan from the imf on high intrest rates is to create govt bonds which can be tax free and sold to people within and nri pakistanis.this way money and its expenditure is accounted for.

 

[pkpatriotic]

IMF not pressing for defence cuts
By Anwar Iqbal
Sunday, 26 Oct, 2008

WASHINGTON: The International Monetary Fund never asked Pakistan to cut military spending by a third, although it has urged the country to take a number of painful economic measures, a senior Pakistani diplomat told Dawn on Saturday.

Intensive Pakistan-IMF consultations have been taking place in Dubai since Tuesday, for a bailout plan to avert possible debt default.

Both sides are believed to have agreed in principle on the need for help that was decided in their meetings in Washington in September.

If the talks succeed, the Fund’s board of governors, which meets in Washington on Nov 7, can approve a loan of about $9.6 billion from the IMF over three years at a six per cent interest rate.

Islamabad immediately needs $4 billion to $5 billion to stabilise the economy and enhance confidence in its financial system.

'There have been suggestions of general reductions in expenses but not a word about the military,' said the Pakistani diplomat who is aware of the ongoing negotiations between Pakistan and the IMF to bailout the country from a possible economic collapse.

'These are wrong speculative stories,' said the diplomat when asked to comment on reports published in a section of the press that the IMF had asked Pakistan to cut military spending by a third.

The diplomat pointed out that same stories also claim that the IMF and other donors wanted to help Pakistan because they thought the country had a key role to play in the war against the Taliban and Al Qaeda.

'How can you fight the militants without a strong army?' the diplomat asked.

'The United States and other allies want Pakistan to play a greater role in this war and they know that this cannot be done by downsizing the army.'

The diplomat, however, acknowledged that the US wanted Pakistan to 'refocus its military strategy on fighting the militants' instead of devoting most of its resources on confronting India.He said that the IMF and Pakistan were discussing various proposals to reduce expenses but nothing had been finalised yet.

'The measures being discussed include reducing the trade gap, readjusting balance of payment and other similar steps needed to strengthen the economy,' he said.

Apparently, the IMF is willing to help Pakistan on the condition that it will have a major say in the country’s economic policies.

The conditions include allowing six IMF and two World Bank directors to oversee preparations for the country’s next budget. They would also have a say in the affairs of the State Bank of Pakistan as well.

IMF officials will also monitor tax collection at the provincial level.

Among the reforms suggested by the IMF is a proposal to reduce the number of pensionable government jobs by almost half.

Pakistan is awaiting outcome of the ‘Friends of Pakistan’ conference in Abu Dhabi next month and the ongoing negotiations with international financial institutions, before accepting IMF’s conditions. But vibes coming from these sources for urgent cash of about $4 billion it needs, are far from optimistic.

Earlier this week, some US media outlets quoted a senior US State Department official as saying that the Pakistanis were not happy with IMF’s conditions but they were forced to go to the Fund because other donors were not willing to help.

The US media reported on Saturday that President Asif Ali Zardari plans to visit Saudi Arabia early next month to urge the kingdom to rescue Pakistan.

Earlier this month, Saudi Arabia, China and the United States refused to provide large cash advances to Pakistan before the country undertakes the much-needed economic reforms.

Pakistan is now rated among the worst credit risks in the world, ahead of only the Indian Ocean Seychelles islands in the Standard & Poor’s index.

 

[A.Rahman]

If they don't get it from the IMF, where do you suppose they should get the desperate needed funds from?.

from bhutto's foreign bank accounts with contain millions is loot