I think the Economists are not dumb. On the other hand, the media has always something to dramatize because they want to make money...
Economists want PML-N to open immediate talks with IMF
ISLAMABAD: The upcoming PML-N government will have to take tough decisions on the economic front including approaching the IMF for obtaining bailout package of $5-7 billion to avert balance of payment crisis and preparing ground for presenting a feasible budget for 2013-14.
The government will have to finalise the budget keeping in view its priorities envisioned through its manifesto for wining the 2013 general elections.In order to curtail non essential imports, the import of military hardware could be halted at this difficult time, said experts.
“The plate for upcoming government will be full and they will have to start work for fixing the economic problems from day one,” renowned economist Dr Hafeez A Pasha said while talking to The News here on Sunday.
First of all, Dr Pasha said Pakistan would have to focus on balance of payment position in the wake of dwindling foreign currency reserves. So there will be two options; either to tighten the belt by compressing imports to the tune of $3 billion on immediate basis or approaching the IMF to avoid default.
According to Dr Pasha, the PML-N in its manifesto had envisioned to impose regulatory duty on non essential items of imports so curtailing imports could pave the way for avoiding the IMF programme on short-term basis.
“There are 60 percent essential items of imports and 40 percent non essential items, that could be discouraged to reduce the import bill,” he said and added that the import bill had surged up to $45 billion that needed to be reviewed in detail.
He said the PML-N government had compressed imports at the time of nuclear explosions so it could be done at this difficult economic situation again if the government preferred to delay the IMF programme.
“First few weeks are important and the government will have to take measures to reduce loadshedding in the wake of upcoming severe summer season,” he said and added that the monster of circular debt would have to be tackled to achieve the desired results.
On fiscal side, he concluded that the government would have to reduce expenditure on immediate basis as raising revenue at time of slowing down of economy seems difficult.When contacted, Dr Ashfaque H Khan, who is currently serving as Dean Nust Business School (NBS), said the government should start immediate discussion with the IMF for finalising a deal and reform agenda for next three to five years. “It will help the government estimate foreign inflows for finalising the next budget,” he said, and added that it would ensure confidence that is pre-requisite for boosting economic activities.
The upcoming government, he said, should also install a credible economic team as the incumbent team had failed to deliver in last three years as they presented the budget which never saw light of the day from start of financial year. “This team should be changed to ensure credibility of the next budget,” he added.
He also said that the economic reforms agenda should enlist fixing the problems of energy sector as continuous loadshedding is causing huge losses to the national economy.The sources said first the upcoming government will have to take stock of existing precarious position of different key institutions that were destroyed by the last PPP-led regime by making wrong appointments on political basis and mismanaged up to such an extent that these institutions were heading towards total collapse.
Economists want PML-N to open immediate talks with IMF | PurePakistan
