Pakistan goes to beg IMF.

[naumananjum]

khazana khali hai
jaibein bharnay k lyai loan lkaina paray ga...!!!!

 

[RAMPAGE]

Rampage,my point of view is,why that PML-N lied to us?just to get votes?why didn't they said this earlier?we all knew that PML-N will get loan,but the truth is,we were not ready to hear the truth since beginning..
No actually we want them to lie us...!!

even PTI would've gone to IMF as Mr. Asad Umer said.i'm just saying that it's not a bad thing.

 

[Slav Defence]

even PTI would've gone to IMF as Mr. Asad Umer said.i'm just saying that it's not a bad thing.

Finding of suitable measures is not a bad thing..but denying them to get votes is a bad thing.

 

[niaz]

Rampage,my point of view is,why that PML-N lied to us?just to get votes?why didn't they said this earlier?we all knew that PML-N will get loan,but the truth is,we were not ready to hear the truth since beginning..
No actually we want them to lie us...!!

Real reason is confusion among Pakistanis on whether Taliban are our friends or our enemies. Consequently there complete breakdown of law & order. This in turn affects economy and our ability to pay back existing loan.

Naturally the lender wants to ensure that the money loaned will be recovered. Ishaq Dar says that we need to borrow to pay off previous IMF loan. Thus new IMF loan will have stringent conditions making lives of ordinary Pakistanis even more unbearable. A classic catch 22.

Unless you stop tax theft (most MNAs/MPAs dont pay tax either), tax agricultural income, cut down subsidies and reduce non development expenditure; improve law & order situation and provide sufficient power to the industries; this is a never ending cycle.

No gov't has a magic wand or a hidden formula unknown to anyone else that will solve this problem. You simply cannot continue to spend 101 rupees when your income is only 100.

A truthful article published toady.

The willing lender


Abid Hasan
Monday, June 24, 2013
From Print Edition


85 5 33 0


Pakistan and the IMF have started discussions for a fresh round of IMF financing. This will be the twelfth IMF programme in over two decades. Pakistan holds the unique distinction of not only being one of the most frequent borrowers of the IMF, but also one with the worst track record of programme implementation. Despite repeated poor performance by Pakistan, the IMF has generously provided financing – with the same conditions, but different wording each time.

For over two decades, the Pakistan-IMF relationship has been a merry-go-round journey, with the IMF jumping on the merry-go-round ever so often – knowing fully well that it will continue going round in the same circle. The IMF became a willing ‘lender of first resort’, rather than its mandated role as a responsible ‘lender of last resort’.

IMF financing has increased public debt, without any commensurate benefit to the people of Pakistan. The Pakistani elite has benefitted from IMF bailouts, which have protected its lifestyles and tax-evading behaviour. On the other hand, the majority of the people were saddled with having to pay back the debt through indirect taxes. The IMF is equally culpable for Pakistan’s debt overhang. It knew fully well that the governments it lent to were run by elite white-collar crooks and unconstitutional military dictators, and that there was complete absence of accountability for poor programme implementation.

Whereas every Pakistani knew that the governments in power were not serious about reforms, the IMF conveniently ignored the obvious. The IMF has rewarded poorly performing governments and failure. By repeated undemanding bailouts, it allowed successive policymakers to take the soft option of borrowing, rather than the hard choice of raising taxes from the elite.

Pakistan has suffered from the absence of ‘accountability for results’ within the relationship between the IMF (and other international financial institutions) and poorly-governed borrowing countries. There is no personal penalty for irresponsible lending within international institutions or reckless borrowing by senior policymakers – no lending (or borrowing) agency management or staff has ever been fired for bad lending (or bad borrowing). While Pakistan sank, IMF mission chiefs got promoted.

As IMF negotiates the new programme, it must incorporate lessons of failure in its upcoming programme and not sacrifice sound policy in the interest of expediency. As a minimum, it must insist on some ‘game changing’ reforms.

As far as tax reforms are concerned, the programme must include:

(a) legislative and administrative actions to overhaul the Federal Board of Revenue (FBR), especially focusing on establishing an independent authority whose board and senior management is appointed through a transparent and depoliticised method; empowering senior management to undertake institutional reforms to convert the FBR from an extortionist and corrupt organisation to a high integrity ‘customer-friendly’ agency; changing FBR rules to eliminate harassment tactics, with stiff penalties for frivolous and unsubstantiated tax notices; major downsizing to get rid of corrupt and incompetent staff;

(b) removal of all tax exemptions, and establishing a low uniform import duty to get rid of the corruption-ridden cascading tariff structure;

(c) uniform VAT at all levels and on all economic activities;

(d) wealth tax to capture the trillions of rupees of wealth created by rising real estate prices and in the stock market;

(e) audit of tax returns of all elected and senior civil, military and judicial officials. This would set the ‘tone at the top’ and provide the FBR the moral authority to audit tax returns of the elite in the private sector;

(f) audit of tax returns of all those taxpayers whose bulk of reported income is from agriculture, stock market, real estate or foreign remittance. This would plug a major source of tax evasion;

(g) presumptive tax notice to the millions of household and commercial energy consumers, whose annual electricity/gas bills are a clear indicator that their annual income is above the tax-filing threshold.

Expenditure allocation and management needs to be overhauled to send a clear signal to taxpayers that their taxes are wisely spent. Action in this area must include establishing an independent commission which would recommend to parliament, within 60 days, elimination of wasteful current and development expenditures (including in the defence establishment), downsizing of government and closure of redundant agencies; mechanisms to enhance public oversight on expenditure decisions; monetisation of perks and privileges of elected and government officials, to eliminate the ‘entitlement mentality’.

The following measures must be included in the programme to reduce and address the debt overhang: (i) a credible plan to reduce fiscal deficit to four percent in three years; (ii) revising the flawed Fiscal Responsibility Law to change the debt ceiling from debt-to-GDP basis to debt service-to-tax revenue basis, with criminal and civil penalties on the finance minister for violation of the ceiling; (iii) revision of the unsound National Finance Commission (NFC) Award which has led to bankruptcy of the federal government. The NFC transfers must include a transfer category linked to increase in provincial taxes; (iv) changes in the State Bank of Pakistan (SBP) Act and banking laws to provide complete autonomy to the SBP to eliminate its subservience to the Ministry of Finance and strengthen its board’s composition and authority; and establish legally binding limits on commercial bank financing of government.

The programme must require an overhaul of untargeted subsidies through the following actions: (a) shifting of all consumer subsidies – electricity, gas, fertilizer, food items, etc – to the provinces, so that they decide who should be subsidised (within the province). The federal government should only fund the National Income Support programme, and any subsidy to Fata on account of war (b) rationalisation of electricity tariffs and petroleum and consumer gas prices. As a minimum, fertiliser factories and CNG stations should be charged full price for gas, and well-head gas and petroleum prices should be raised to cost of imported energy.

The programme must include a timetable, and credible upfront restructuring and downsizing actions to privatise all SOEs within a 2-3 year period. A necessary upfront action should be the removal of SOEs from control of line ministries, and government officials from SOE boards.

The above actions are necessary to overcome the fiscal crisis and strengthen macro-economic management. It is time the IMF acts like a responsible doctor treating cancer, rather than continuing to lend like the National Bank of Pakistan.

The writer is a former operations adviser at the World Bank.Email: fffhasan@gmail.com

http://www.thenews.com.pk/Todays-News-9-185576-The-willing-lender

 

[Slav Defence]

Real reason is confusion among Pakistanis on whether Taliban are our friends or our enemies. Consequently there complete breakdown of law & order. This in turn affects economy and our ability to pay back existing loan.

Naturally the lender wants to ensure that the money loaned will be recovered. Ishaq Dar says that we need to borrow to pay off previous IMF loan. Thus new IMF loan will have stringent conditions making lives of ordinary Pakistanis even more unbearable. A classic catch 22.

Unless you stop tax theft (most MNAs/MPAs dont pay tax either), tax agricultural income, cut down subsidies and reduce non development expenditure; improve law & order situation and provide sufficient power to the industries; this is a never ending cycle.

No gov't has a magic wand or a hidden formula unknown to anyone else that will solve this problem. You simply cannot continue to spend 101 rupees when your income is only 100.

So,Mr.Niaz,this conversation fully sums up following factors:
--We need to work on improvement of Law and order situation.
--Need to take money laundering cases seriously.
--Government must make clear policies about TTP and such terrorist organizations.I have seen that many people support Taliban because they think that Taliban are fighting against Americans.
--Furthermore,one clear example of people's confusion about such concepts is,their expression of sympathies for cases like terrorists of Lal masjid.

So,it is clear that issues are inter-related with each other,but I present only one solution to you which will solve all our problems.

--Strong,corrupt free leadership and responsive,sincere,non-corrupted government body..
and this is impossible.

 

[Jungibaaz]

Not the fault of PML-N. They were put into terrible financial crisis period by PPP and IMF option had to be realized. Hopefully the money would be used in the right areas to get the economic growth rate moving positively and sooner than later, they pay the money back.

No excuses.

The two baldy brothers promised us the moon and the stars.
If they can't deliver adequately, for what ever reason...

Be it their own faults or those of previous government...
They shall be held accountable for failing to deliver on promises and wasting 5 years.

even PTI would've gone to IMF as Mr. Asad Umer said.i'm just saying that it's not a bad thing.

Going to IMF is necessary.
However, it can be a bad thing IF while we eat up our loans we don't fix ourselves up.
If we take a loan and things continue for another few years like this, come the end of this loan and time for repayment, we will find ourselves in a bad situation.

Taking such massive loans is no fix, it's a short term tweak. It needs to be accompanied by real economic reform and also security needs met. But as we've seen with the recent budget, it's not so different from PPP times, tweaked a bit...
But not enough.

This is why I worry.

 

[niaz]

So,Mr.Niaz,this conversation fully sums up following factors:
--We need to work on improvement of Law and order situation.
--Need to take money laundering cases seriously.
--Government must make clear policies about TTP and such terrorist organizations.I have seen that many people support Taliban because they think that Taliban are fighting against Americans.
--Furthermore,one clear example of people's confusion about such concepts is,their expression of sympathies for cases like terrorists of Lal masjid.

So,it is clear that issues are inter-related with each other,but I present only one solution to you which will solve all our problems.

--Strong,corrupt free leadership and responsive,sincere,non-corrupted government body..
and this is impossible.

Agreed 100%. As you mentioned, from where would we get such statesmen? Elections keep throwing up the same faces or same names with different faces. You got to work with what you have got.

 

[Slav Defence]

Agreed 100%. As you mentioned, from where would we get such statesmen? Elections keep throwing up the same faces or same names with different faces. You got to work with what you have got.

Well said,and even though if some sincere ones will try to get it then it will be almost impossible for them due to following factors:

--Lobby system of old parties.
--Army's support to some,if I am not wrong.
--Illiteracy of 70% of our public.
--Rest 30% supports old ones and are not ready to give new chance to novice parties.

PTI is an example for us..If we analyze carefully then we will extract a loads of facts.

 

[sab]

I have better proposals..

1- Stop subsidies for Indian transit and check smuggling.
2- Privatize PIA, Steel, Railway, Judiciary and police.
3- Liberalize investment in alternate energy.
..........

is he banned for this post?

 

[Gryphon]

July 01, 2013

International Monetary Fund’s clutches have expanded further as the Fund agreed to pay $5 billion loan to Pakistan, media reported on Monday.

The loan agreement on fresh loan was reached after two days of talks in Islamabad. Ministry of Finance has also confirmed the breakthrough.

During talks, the government officials addressed IMF’s reservations over energy sectors and taxation side.

The authorities assured IMF that tax collection target has been set at Rs. 2475 billion during the new fiscal year through expansion in the tax net, whereas, subsidy will be reduced step by step.

IMF was also told that remittance of power tariff and line losses will also be brought down.
The Fund's mission will stay in Pakistan till Tuesday.

IMF agrees to give Pakistan $5 billion loan

 

[kaykay]

Actually Pakistan is getting $11 Billion in total as loan from IMF and Asian Development Bank.

 

[David James]

Pakistan seeks $11 billion bailout package from IMF, donors


Cash-strapped Pakistan on Tuesday moved closer to securing a massive $11 billion economic bailout package from international donor agencies including the IMF, to revive the ailing national economy, media reports said.

After lengthy discussions between finance minister Ishaq Dar and International Monetary Fund (IMF) team led by Jeffery Frank, the two sides have reached closer to finalising $5.4 billion loan package, The Dawn reported.

In addition to the IMF assistance, Pakistan will also get a $5.6 billion loan from the Asian Development Bank and the World Bank as well as countries like Japan, U.S. and U.K..

The agreement with IMF will pave the way for additional money from the donor banks and countries and the “total volume of loan will be $11 billion,” the paper said citing official sources.

Pakistan needs to meet tough conditions of the donor community before the money starts pouring in, including IMF’s demand to reduce fiscal deficit to 4.5 per cent from nearly 8 per cent, increase power tariffs, withdraw subsidies, increase tax base and restart privatisation.

Some of the conditions, if met, will result in price hike and joblessness but the country will have to swallow the bitter pill to kick start the revival of the economy.

Pakistan seeks $11 billion bailout package from IMF, donors - The Hindu

Clean up ur house first to start with collect taxes and reduce military budget.

 

[sree45]

Pakistan seeks $11 billion bailout package from IMF, donors


Cash-strapped Pakistan on Tuesday moved closer to securing a massive $11 billion economic bailout package from international donor agencies including the IMF, to revive the ailing national economy, media reports said.

After lengthy discussions between finance minister Ishaq Dar and International Monetary Fund (IMF) team led by Jeffery Frank, the two sides have reached closer to finalising $5.4 billion loan package, The Dawn reported.

In addition to the IMF assistance, Pakistan will also get a $5.6 billion loan from the Asian Development Bank and the World Bank as well as countries like Japan, U.S. and U.K..

The agreement with IMF will pave the way for additional money from the donor banks and countries and the “total volume of loan will be $11 billion,” the paper said citing official sources.

Pakistan needs to meet tough conditions of the donor community before the money starts pouring in, including IMF’s demand to reduce fiscal deficit to 4.5 per cent from nearly 8 per cent, increase power tariffs, withdraw subsidies, increase tax base and restart privatisation.

Some of the conditions, if met, will result in price hike and joblessness but the country will have to swallow the bitter pill to kick start the revival of the economy.

Pakistan seeks $11 billion bailout package from IMF, donors - The Hindu

Clean up ur house first to start with collect taxes and reduce military budget.

US, UK, Japan? If am not wrong the pakistani keyboard warriors troll them the most (If u exclude India).

 

[David James]

US, UK, Japan? If am not wrong the pakistani keyboard warriors troll them the most (If u exclude India).

That's shameful to say the least one should be faithful to the aid providers and respect them.

 

[JohnyD]

looks Pakistan has been asking for it every year and now must have included this component in their official annual budget!