PSO warns of complete dry-out

[IceCold]

A complete black out followed on by a complete lack of fuel what so ever and people will still have enough reasons to vote for ganjas and kappa's. All they need is a plate of Biryani and whaoooooo here goes the vote.

 

[Dillinger]

Extending the line of credit will be only short term (and short sighted). What about calling in the 'outstanding receivables'? As our RiazHaq claims the economy in Pakistan is on the upswing, should'nt the outstandings be cleared?

If by an upswing he means another approaching IMF danda then we are on the same boat. Our fiscal debt seems bad hunh, their public debt stands at 50.4% of their GDP! Revenues in 2012 stood at 29.51 billion$ and expenses at 44.19 billion$.

Transcript of a Press Briefing by William Murray, Deputy Spokesman, External Relations Department, International Monetary Fund
Washington, D.C.
Thursday, March 14, 2013

QUESTIONER: I have a question on Pakistan. The Asia Development Bank has said that Pakistan has reached a critical balance of payments situation. Are there any talks with the IMF on some sort of interim facility with the Pakistanis until they reach the election, similar to what is possibly going on with Egypt or any further comment on Pakistan?

MR. MURRAY: To remind you, we have a Resident Representative in Pakistan with active engagement on a day-to-day basis there. What I can tell you is that the Fund is engaged with Pakistan but there has not been a formal request from Pakistan for new financing from the IMF. We had a mission recently in Islamabad, but there has not been a formal request.

Transcript of a Press Briefing by William Murray, Deputy Spokesman, External Relations Department, International Monetary Fund

KARACHI: The repayments of $785 million to International Monetary Fund (IMF) over the next two months may have serious implications for the country.

The next elected government that is expected to take charge by mid of May, will find the foreign exchange reserves at dangerously low level.

The State Bank said on Wednesday that it would pay $143.7m on Thursday as repayment to IMF under the standby agreement.

The standby agreement was signed by the previous government five years back and since then the country showed strength on external front.

The reserves of the country started increasing during the five years and reached a peak of $18.294 billion in July 2011.

However, the poor economic growth, low export growth, sharp decline in foreign investments and repatriation of foreign investments squeezed the reserves.

The State Bank said the next installment to IMF would be paid on 1st April that would be SDR71m (approximately $107m at the current rate). Another payment is due on May 10 that will be of SDR95m (or $143.7m). The largest payment within next two months will be SDR258.42m (approximately $390m) on May 24.

The total outflow would be equal to $785m that would further squeeze the reserves, particularly the forex holdings of the State Bank, which stood at $7.45 billion on March 21, 2013.

The outflow would put the next government in serious problem in its initial days. This would be an emergency-like situation to avoid default on external front that requires immediate help from the IMF.

Initiating a dialogue with the IMF for securing fresh credit line would be a big problem for the next government.

The problem could be acute if the rising current account deficit continued to take a shape like it was in the previous fiscal. The previous fiscal year witnessed a current account deficit of $4.6bn.

The current account deficit in the first eight months of this fiscal stood at $700m, which is much smaller compared with $3.235bn in the same period last year.

The caretaker government would not initiate dialogue for loans from IMF or any other donors as it is out of their ambit and the IMF would not hold negotiations with the interim setup.

Analysts and currency experts said the expected fall in the foreign exchange reserves would weaken the rupee. The local currency lost about 58 per cent against the US dollar during the last five years.

ISLAMABAD: Pakistan has reached a critical balance of payments situation and will need another package from the International Monetary Fund before the end of the year to avert a crisis, one of the biggest lenders to the country claimed on Wednesday.

Asian Development Bank’s country director Werner Liepach also told Reuters in an interview Pakistan would need up to $9 billion from the IMF to shield the economy.

Pakistan currently has enough hard currency to cover only about two months of imports.

Answering a question whether the country was in a balance of payments crisis, Mr Liepach said: “It depends how you define a crisis. Maybe we are already in a crisis.”

In 2008, the country averted a balance of payments problem by securing an $11bn IMF loan package, but the IMF suspended the programme in 2011 after economic and reform targets were missed.

Asked if Pakistan could avoid going back to the IMF, Mr Liepach said: “I don’t see that happening. It’s a question of time. They need to do this before the end of this calendar year. It needs to be $6 billion to $9 billion.”

So far, remittances from Pakistanis working overseas of about $1bn a month have helped keep Pakistan afloat, but by a thin margin.

“We are now at less than three months of imports. The current outlook is for a further decline in foreign exchange reserves,” said Mr Liepach.—Reuters

Pakistan will need another IMF package, says ADB | Pakistan | DAWN.COM

AND the Pièce de résistance :-

Tax exemption surpasses IMF loans

SLAMABAD, Jan 29: Over the past 54 months, the PPP-led coalition government has given tax exemptions to certain influential lobbies and the elites which amount to more than the loans acquired from the International Monetary Fund to correct the balance of payment.

Between 2008 and Dec 2012, the government took loans of Rs604 billion from the IMF and granted tax exemptions to the tune of about Rs719bn, the Federal Board of Revenue informed the Senate on Tuesday.

Almost 84 per cent of tariff and duty was exempted or reduced for the benefit of the lobbies through statutory regulatory orders (SROs) issued by the government, said the FBR in a written reply to a question raised by PML-N Senator Nuzhat Sadiq. She had asked about the year-wise figures of exemptions given to various sectors through the SROs.

Former adviser to the government on economy Dr Ashfaq H. Khan told Dawn that it was the responsibility of the government to bring all the sectors enjoying exemptions into the tax net.

“We need to bring our house in order by taxing all sectors which are contributing to economic activity, such as income from agriculture and services sectors like doctors and lawyers,” he said.

“We can mobilise our own resources by bringing all sectors into the tax net as demanded by international financial institutions,” he said.

Less than 0.6 per cent of the 190 million people in the country pay taxes. The National Database and Registration Authority has identified 3.8 million people who are not paying taxes. Who was stopping FBR from performing its duty to bring more people into the tax net, Dr Ashfaq asked.

State Minister for Finance Saleem H. Mandviwalla said in the upper house that the exemptions were a continuation of the policy of previous governments. He said the SROs were issued to encourage certain sectors like textile.

The amount of income and sales tax waived from 2008-09 to 2011-12 was estimated at Rs298.046bn — Rs58.364bn in 2008-09, Rs73.943bn in 2009-10, Rs71.831bn in 2010-11 and Rs93.908bn in 2011-12.

And customs duties waived or exempted through the SROs from 2008-09 to Dec 31, 2012 stood at Rs420.724bn — Rs72.486bn in 2008-09, Rs80.107bn in 2009-10, Rs92.587bn in 2010-11, Rs114.264bn in 20011-12 and Rs61.280bn in the first six months of 2012-13.

The FBR said attempts had been made in the past to prepare a reasonable estimate of quantum of tax evasion, but such estimates were prone to error because of non-availability of veritable information, the large size of unorganised sector and non-documentation of economy.

Tax exemption surpasses IMF loans | Pakistan | DAWN.COM

@Armstrong abbe tu commerce ke field me halwa puri bechne aya tha kya, danda de apne babus ko, le doobenge tumhe arbi dariya mai.

 

[Bratva]

We are seeing the effects of PSO defaulting... Power blackouts have increased from last couple of days. In cities load shedding is been done for 8-10 hours daily