IMF team concludes Pakistan visit without finalizing a possible bailout

[maithil]

PMIK has a difficult balancing act to produce given the circumstances. Maybe UAE will fill the gap and IMF won't be needed fter all.

Yes. That’s true. Very difficult task. Would hate to be in his position.

 

[VCheng]

Yes. That’s true. Very difficult task. Would hate to be in his position.

Well, he wanted it, so he must be able to do what is required of him, or at least that is the hope.

 

[LASER1]

Disclosing previous deals and cutting the defense budget is a nay then. IMF

 

[Cash GK]

real question is, did you put the poo in the loo?

i don’t but your countrymen surly do

 

[BATMAN]

Avoiding IMF program means avoiding the tough measures IMF would have suggested. This also means that the real issues with economy will not be dealt with. But this will give relief to People for now.

I hope PTI regime of headless chickens, would publicize those tough measures of IMF, which in my guess usually are raise in taxes, utility costs, etc. but the regime will do that anyway, so telling us PTI regime didn't agreed on my guessed conditions, should not be accepted by the educated and open minded people.

 

[Hakikat ve Hikmet]

The Battle of Waterloo was won at the playgrounds of Eaton* - a British saying
*A top residential school where the British elites send their kids

IK is cool with his tactics and strategies!!! GOD helps those who help themselves....

 

[RPK]

For every thanks I will build a toilet in India.

I know you said it for sarcastic. But thank for our nation building help

 

[ziaulislam]

govt has deadlock on tax refroms..govt target is 4300 billion vs IMF asking for 4700..IMF proposed that thi should be acheived by increasing sales tax by 2 points which is what they always do..while Asad umar team thinks that they will achive better figures by next year

ultimately issue is simple..FISCAL deficit..bringing it down from mammoth 6.6 to less than 5 will be a daunting and near impossible task..while keeping in view that there is off the books 1400 billion rupees marked in circular debt too(that lone is 4% of GDP or whole year fiscal deficit)

in short the success of IK hinges on simple thing..tax reforms(corruption/money laundering) and foreign investment..if he can do tax reforms and bring enough foreign investment especially in housing sector he will achieve his goals

 

[nahtanbob]

IMF is in real trouble now. Hope pakistan shows some mercy and agrees to accept that money or else IMF will have no where to show that face.

you are hilarious

 

[Abdussamad]

ultimately issue is simple..FISCAL deficit..bringing it down from mammoth 6.6 to less than 5 will be a daunting and near impossible task..while keeping in view that there is off the books 1400 billion rupees marked in circular debt too(that lone is 4% of GDP or whole year fiscal deficit)

in short the success of IK hinges on simple thing..tax reforms(corruption/money laundering) and foreign investment..if he can do tax reforms and bring enough foreign investment especially in housing sector he will achieve his goals

Fact is we are in a debt trap now. In order to curtail the trade deficit we have to devalue the rupee even more and raise interest rates. IMF wants rupee at 150 and interest rates in double digits. Problem is both these things will increase the fiscal deficit. Devaluation will increase the burden of our dollar denominated external debt. Interest rate rises will hurt the largest debtor the most and that is the government. Cost of debt servicing, which is already the largest part of our budget, will rise. At the same time we have to curtail fiscal deficit. So how to do all this?

Tax reforms will take ages to take effect even if IK manages to accomplish them (which is no mean feat considering that even the dictator Musharaf had to back down from this). Probably they will have to cut defence spending. Will the army tolerate this? It is the sacred cow after all!

 

[ranjeet]

IMF mission skeptic about money laundering

ISLAMABAD: Amid US President Donald Trump’s statement against Pakistan, the IMF mission has raised serious reservations about rampant incidents of money laundering occurring in the country indicating weaknesses in banking sector and its regulatory framework.

The IMF may place 27 action plan of Financial Action Task Force (FATF) as part of benchmark criteria for providing possible bailout package to Pakistan’s struggling economy. Official sources told The News on Monday that the Asia Pacific Group, a regional body of FATF, has recently raised 670 reservations on Pakistan’s performance for combating money laundering and terror financing with the deadline of next month (December 15, 2018) for getting back written replies about the measures taken by Islamabad to remove such huge numbers of reservations.

Exactly at a time when the IMF mission is holding crucial parleys with Islamabad on possible bailout package of $6 billion, US President Donald Trump alleged Pakistan for not doing much for US so defended his administration stance to half assistance for Pakistan.

The sources said that the IMF mission would conclude its talks on Tuesday (today) as the IMF was expected to have communication with the press at the end of talks with possibility of issuing just a press statement instead of holding any press briefing.

Another thing that increased problems for Pakistani negotiating team with the visiting IMF mission was increasing episodes of money laundering and banking frauds that had raised serious questions about the capability and capacity of the banking sector and its regulator to comply with 27 action plan outlined by FATF.

Pakistan will have to undergo three main reviews for gauging its performance under FATF action plan as first review is expected to take place in first week of January 2019 at Paris, second in May 2019 and third in September 2019. In the meanwhile, the FATF can take its decision on the basis of outcome of performance of Islamabad on account of 27 action plans. There are three possible scenarios graduating from grey to green list, falling from grey to black list and third keeping Pakistan into grey list for another review.

The visiting IMF mission also raises questions to ascertain facts and then satisfy its board members that why Pakistan’s economy deteriorated without witnessing any external shocks after successfully graduating from the last IMF program by end of 2016. The oil prices in international had remained stable, the country achieved higher growth and inflation remained lowest so there was need to analyze reasons for derailment of the country on economic front.

So the IMF considers that political stability is a prerequisite for achieving stability on the economic front so it will be on the will of the PTI led regime that how it ensures political ownership on agreed structural reforms Pakistan agreed to undertake under the possible three year program.

Thirdly, Pakistan’s negotiating is quite weak as Finance Minister Asad Umar held a meeting with independent economists and members of high profile EAC on the idea of IMF for floating exchange rate. In this crucial meeting, the Secretary Finance Arif Ahmed Khan was found missing so questions were raised that why the government was not willing to bring any capable person on this important slot.

Fourthly, the IMF asks Pakistan to raise its tax revenues by 0.4 to 0.5 percent of GDP but there is scarcity of ideas within the FBR that might result into raising GST rate or withholding rates only. The tightening of monetary and fiscal policies and administrative measures on utilities will choke growth and push up inflationary pressure under the tight noose of the IMF.

Fifthly, if Pakistan and IMF agree on Memorandum of Economic and Fiscal Policies (MEFP), even then the chances will be hard for approving the bailout package within December so it may be tabled before the Fund Executive Board for approval in first week of January 2019.

https://www.thenews.com.pk/print/395984-imf-mission-skeptic-about-money-laundering

 

[Śakra]

@Mage funny how they’re celebrating this like this an achievement when they’ve reslly just shot themselves in the foot. They approached IMF to help them from defaulting. They haven’t solved that problem. Instead, they closed the door to a solution.

 

[Mage]

@Mage funny how they’re celebrating this like this an achievement when they’ve reslly just shot themselves in the foot. They approached IMF to help them from defaulting. They haven’t solved that problem. Instead, they closed the door to a solution.

Well IMF loans come with a lot of constrains. If they can solve their crisis without IMF it's better for them. But looking at Pakistan since Musharraf days, it's beyond them.

IMF package would've forced them to make some reforms to their economic system which would have done some long term good.

But anyway if they can solve their crisis without IMF and at the same time carry out some economic reforms, it's best for them.

Sometimes the best posts in a thread gets negative rating...huh.

 

[python-000]

 

[django]

@Mage funny how they’re celebrating this like this an achievement when they’ve reslly just shot themselves in the foot. They approached IMF to help them from defaulting. They haven’t solved that problem. Instead, they closed the door to a solution.

@Nilgiri @Desert Fox .... Good heavens what am I seeing @Śakra and Mr Magoo @Mage seem to have become the best of buddies

Now I can truly say I have seen it all