The country has been handed over to IMF Dr Kaisar Bengali

[Abdussamad]

For how long can Pakistan spend money on its defense budget that it does not have?

Indeed but it was considered the sacred cow that no one could touch. So it's a big deal if they agreed to give the generals a paycut!

 

[VCheng]

Indeed but it was considered the sacred cow that no one could touch. So it's a big deal if they agreed to give the generals a paycut!

Well, we still do not know the details, and for sure we do not know if the commitments made now, if any, will not be the subject of waivers later on.

 

[Proudpakistaniguy]

IMF as a lender can establish only the broad guidelines that are well-known, for example to reduce deficit, and balance of payments. The government taking the loan comes up with the plan to achieve the targets, not the IMF. For example, in Pakistan's case, it has decided in the past to cut development spending while maintaining defense expenses due to its security situation. What it has decided this time around is not fully known yet in this aspect.

The hypocritical part is when the government places the blame for any hardship endured by the people on IMF, which is just plain wrong, and done only for political reasons. Always remember that going to the IMF is a choice up to the government to decide, not anyone else. It is the government that puts forward the plan to meet the structural reforms that are necessary, not the IMF.

you are again bringing irrelevant points. I had very specific question. Is there any strings attached to an IMF loans? Answer is yes because there is no such thing as free lunch . Read the IMF agreement which clearly state

“The Pakistani authorities and the IMF team have reached a staff level agreement on economic policies that could be supported by a 39-month Extended Fund Arrangement (EFF) for about US$6 billion. This agreement is subject to IMF management approval and to approval by the Executive Board, subject to the timely implementation of prior actions and confirmation of international partners’ financial commitments.

https://www.imf.org/en/News/Articles/2019/05/12/pr19157-IMF-Reaches-Staff-Level-Agreement-on-Economic-Policies-with-Pakistan-for-a-Three-Year-EFF


Loan approval is subject to certain prior actions. When IMF ask Governments to devalue their currency, increase their eclectic/gas tariffs, keep interest rates high or leave exchange rate to be determined by the market, remove any subsidies which benefit poor , cut back essential services etc then these are some pre-actions dictate by IMF and yes government has no options but to either take loans with all these terms or conditions or leave it but saying that there is no demand or criteria for going into IMF programme is non sense . These terms and conditions associate with IMF programme often put politicians in position where they have to implement unpopular/unfair policies bringing inequality and poverty which hit common man to an extent that they bring down their government

 

[El Sidd]

IMF kay saye talay hum ek hain hum ek hain

 

[VCheng]

These terms and conditions associate with IMF programme often put politicians in position where they have to implement unpopular/unfair policies bringing inequality and poverty which hit common man to an extent that they bring down their government

As usual, you are understanding exactly the opposite of what is the true situation:

1. The politicians use populist measures such as energy subsidies and overvaluation of the currency that create the financial crisis for the government in the first place.

2. The terms IMF prescribes are clearly drawn according to good fiscal discipline to resolve the financial crisis when the government approaches them.

3. The politicians then complain that it is the IMF that is demanding these conditions, but in fact those conditions are made necessary by their prior poor management that created the crisis.

Lastly, nobody is forcing the government to go the IMF. Thy can choose not to accept such conditions that the IMF prescribes to resolve the crisis, and also the consequences of such a decision.

You are right, there is no such thing as a fee lunch. The price is to paid by the people whose government mismanages thier own economy according to clear and fundamental fiscal principles.

 

[Abdussamad]

1. The politicians use populist measures such as energy subsidies and overvaluation of the currency that create the financial crisis for the government in the first place.

It's more than just populism. They do it because an undervalued dollar makes it cheaper for them to launder money abroad. This is a kleptocracy after all and the kleptocrats have to send their stolen money abroad because it is not safe in Pakistan. So they prefer an overvalued rupee.

I agree with the spirit of what you're saying. Just wanted to add the above additional reason for why the rupee is always overvalued.

 

[VCheng]

It's more than just populism. They do it because an undervalued dollar makes it cheaper for them to launder money abroad. This is a kleptocracy after all and the kleptocrats have to send their stolen money abroad because it is not safe in Pakistan. So they prefer an overvalued rupee.

I agree with the spirit of what you're saying. Just wanted to add the above additional reason for why the rupee is always overvalued.

Thank you for adding that, but that is STILL not the fault of the IMF.

 

[Abdussamad]

Thank you for adding that, but that is STILL not the fault of the IMF.

You keep saying that over and over again but I don't agree with it. We are in our 13th bailout now and it's still the same old story. The IMF bears some responsibility for not ensuring that we do the reforms we have to. Historically it has given us waivers because its political masters told us to. The IMF's credibility is at stake here. It's stamp of approval won't be worth much in Pakistan's case if it fails to ensure we comply with its conditions i.e. actually undertake reforms.

 

[VCheng]

You keep saying that over and over again but I don't agree with it. We are in our 13th bailout now and it's still the same old story. The IMF bears some responsibility for not ensuring that we do the reforms we have to. Historically it has given us waivers because its political masters told us to. The IMF's credibility is at stake here. It's stamp of approval won't be worth much in Pakistan's case if it fails to ensure we comply with its conditions i.e. actually undertake reforms.

No, IMF is not at fault here. Pakistan's own failures in completing the prescribed reforms are all its responsibility, since IMF is bound by its charter to help a member state when approached. It must help as best as it can, according to sound fiscal principles. It is entirely up to the state to do what needs to be done.

 

[Great Janjua]

Says who.... Kaisar Bengali and chacha Zardari