IMF agrees to lend $6bn to Pakistan: sources

[ziaulislam]

Lol
IMF is tool for USA and USA is tool for Pakistan that is how the world works. Please sit back and digest it.



Oh my good neighbour we are not going to IMF we don't need them read the op it says IMF coming to Pakistan and on Pakistani terms. We are getting foreign exchange and extension in our debt. USA is leaving Afghanistan and Trump want his boys back home. It is all part of making America great again.

It is not only IMF but USA is wishing Pakistan good luck in cricket as well. You see why India can never replace Pakistan? Because Pakistan is too important.

https://twitter.com/x/status/1089766550096236544

So the new trend is Go Green and long live pakistan.

Other reason is USA knows china will bail out Pakistan ..this was something they and i wasn't expecting

 

[TheDarkKnight]

payaray Pakistanio, I wil commit suicide but I will not go 2 IMF 4 loans, those who go 2 IMF sell interests of their motherland, they r traitors, just give me a chance 2 make Pak self reliant, just once'


Someone used to say Something on this line. Then he became Prime minister and ran to Dubai to convince IMF chief for 6 billion dollars.

Anywonder people are mocking him like this..

https://twitter.com/x/status/1094588904508928001

OH nooooo! Look a politician who did something he said he wouldn't do!

@BHarwana did.

Anyways I am not judging on good/bad, just wanting some discussion/analysis from the 3 folks I have talked the most with it about.



Huh? You are implying the previous balance will be written off? Wouldn't this loan (whatever it turns out to be) simply add to the existing balance?

While you have the right to go after the Pakistanis here making tall uninformed claims - but your side (not you) has also made some doomsday predictions of IMF asking Pakistan to free float dollar to 200, drastic hikes in taxes, electricity prices that will break the backs of common Pakistanis and then they will start making demands of undoing partition and running to Modi for help etc. etc.
@VCheng @Nilgiri
Question to you: What is the fuss about 'negotiations' with IMF and Pakistan? I am not as informed in these matters, but I think both parties have a say on the terms. While IMF holds the right to approve/disapprove, it at least listens to the country asking for help on how it will fix its finances and based on the situation there can be several options that can be discussed: increase taxes? which taxes? broaden tax base? commit on reforms or share details of reforms? privatization? etc.
And plus the approval of this loan and the recent progress in Taliban-US negotiation doesn't seem like a mere coincidence; if these are somehow related then we can safely say that Pakistan must have gotten this loans on a favorable term?

 

[VCheng]

Well do we need a loan? After Saudis and UAE and China, I think pm IK don't needs IMF but it is more like IMF needs Pakistan.

I would like to know how the IMF needs Pakistan as you see it. May be you know something that can explain such an interesting perspective on how the IMF works.

At least, I am glad this decision is to be made by PMIK, and no one else.

Question to you: What is the fuss about 'negotiations' with IMF and Pakistan? I am not as informed in these matters, but I think both parties have a say on the terms. While IMF holds the right to approve/disapprove, it at least listens to the country asking for help on how it will fix its finances and based on the situation there can be several options that can be discussed: increase taxes? which taxes? broaden tax base? commit on reforms or share details of reforms? privatization? etc.
And plus the approval of this loan and the recent progress in Taliban-US negotiation doesn't seem like a mere coincidence; if these are somehow related then we can safely say that Pakistan must have gotten this loans on a favorable term?

There is no fuss about these negotiations. The terms are fairly standard, as are the monitoring terms. IMF does not cut special deals outside of its charter for any country. Quite simple, in fact.

 

[Nilgiri]

has also made some doomsday predictions of IMF asking Pakistan to free float dollar to 200, drastic hikes in taxes, electricity prices that will break the backs of common Pakistanis and then they will starting making demands of undoing partition and running to Modi for help etc. etc.

I never supported that stuff, because Pakistan does not have the overleveraging/exposure needed (given the unofficial economy) to truly collapse things like say what happened in Argentina and to some degree in Mexico from IMF based reforms, stringent conditions and bailout cycles etc.

Question to you: What is the fuss about 'negotiations' with IMF and Pakistan? I am not as informed in these matters, but I think both parties have a say on the terms. While IMF holds the right to approve/disapprove, it at least listens to the country asking for help on how it will fix its finances and based on the situation there can be several options that can be discussed: increase taxes? which taxes? broaden tax base? commit on reforms or share details of reforms? privatization? etc.
And plus the approval of this loan and the recent progress in Taliban-US negotiation doesn't seem like a mere coincidence; if these are somehow related then we can safely say that Pakistan must have gotten this loans on a favorable term?

I think the fuss is what people perceive as the costs of such reforms and the fact IMF is now perceived as anti-Pakistan in some way (given its a western bank).

Other than that its basically what the IMF does with any country like Vcheng says.

Yes you are right there will be a balance in the end depending on the reforms delivered, promised and the broader geopolitics too. How favourable the terms of the loan is (still being negotiated/worked out I imagine), remains to be seen....and large part of it also depends on how its used too.

 

[VCheng]

Yes you are right there will be a balance in the end depending on the reforms delivered, promised and the broader geopolitics too. How favourable the terms of the loan is (still being negotiated/worked out I imagine), remains to be seen....and large part of it also depends on how its used too.

IMF conditionalities do not micromanage the country as a matter of policy. They prescribe broad limits according to sound and fair principles and it is up to the borrower to show how to best meet them.

 

[Nilgiri]

IMF conditionalities do not micromanage the country as a matter of policy. They prescribe broad limits according to sound and fair principles and it is up to the borrower to show how to best meet them.

I'm talking more about the result in the end concerning Pakistan economy. IMF is just a source of liquidity like any other.

 

[VCheng]

I'm talking more about the result in the end concerning Pakistan economy. IMF is just a source of liquidity like any other.

Despite the heroic efforts of PMIK, avoiding the IMF bailout may not be likely after all. Even with the suddenly found largess of Middle Eastern friends, the next fiscal year looms even larger.

 

[Nilgiri]

Despite the heroic efforts of PMIK, avoiding the IMF bailout may not be likely after all. Even with the suddenly found largess of Middle Eastern friends, the next fiscal year looms even larger.

Yah seems Moody's has analysed a few things and taken it into account:

https://www.dawn.com/news/1463203

I believe US fed also plans about 2 interest rate hikes this year....that will have some effect too (on all of us though the degree may be high in Pakistan's case).

 

[VCheng]

Yah seems Moody's has analysed a few things and taken it into account:

https://www.dawn.com/news/1463203

I believe US fed also plans about 2 interest rate hikes this year....that will have some effect too (on all of us though the degree may be high in Pakistan's case).

What has happened till now has been suitably encouraged by Uncle Sam to tide PMIK over the immediate crisis via proxies in the ME. (ALL credit goes to PMIK, of course. Of course!) The more durable deals will be finalized over the next few months via well-known mechanisms.

 

[GeraltofRivia]

IMF conditionalities do not micromanage the country as a matter of policy. They prescribe broad limits according to sound and fair principles and it is up to the borrower to show how to best meet them.

The financial and economical targets in the IMF condition are very specific and measurable. If the borrower fails to meet these targets in their periodical review, IMF can hold off releasing the installments. That seems to me is a pretty hands on approach, whereas in a commercial loan scenario, borrowers can operate in whatever way they see fit provided there is enough collateral.

 

[VCheng]

The financial and economical targets in the IMF condition are very specific and measurable. If the borrower fails to meet these targets in their periodical review, IMF can hold off releasing the installments. That seems to me is a pretty hands on approach, whereas in a commercial loan scenario, borrowers can operate in whatever way they see fit provided there is enough collateral.

IMF mechanisms are pretty clear, and well-documented for a reason.

 

[Turingsage]

 

[niaz]

One of the best articles on IMF package that I have come across:

Quote

Good news? Yes. We need the package, not only because of the direct infusion of cash it will bring, but also because this will open up other borrowing opportunities from the open market. And yet, all this means nothing if we don’t get real about what we’ve got to do ourselves.

My worry is that if we keep the current tenor of public debate going, we won’t. As soon as we secure this deal, we are likely going to see the prime minister declare victory like he did after securing money from the UAE and Saudi Arabia. Lost here will be the fact that this money has taken us off the ventilator, nothing more. We are still sick and shall remain so if we don’t overhaul the structures of the economy.

The bottom line is as simple as it gets: we spend way more than we earn and there is nothing short of real and intense structural transformation of the economy that can bridge this gap sustainably. Previously, we behaved like an addict who continues to get an opiate under the promise that he’ll enter serious rehab. In reality, we have neither shown the intent nor seem to have had the capacity to bear the pain the process entails.

This is the only question we should be debating: are we ready for serious rehab, and if so, is everyone clear what all this will entail? If we are, we should be taking the discussion in a different direction: if there were no IMF, no bilateral benefactors, and no remittances, what would we have to do to bridge the revenue-expense gap? That’s the approach we need. If we adopt it, the rest is not rocket science and will follow. But for this, the prime minister would have to move the public narrative away from declaring victory to warning the public that what’s coming is going to hurt, but that it’s a pain we must endure for our long-term success.

None of the previous governments have had the courage to do so. Will Mr Khan?

Unquote

The writer is the author of Brokering Peace in Nuclear Environments: US Crisis Management in South Asia.

www.moeedyusuf.net

Published in Dawn, February 12th, 2019

Full article:
https://www.dawn.com/news/1463298/ready-for-reform

 

[GeraltofRivia]

Yah seems Moody's has analysed a few things and taken it into account:

https://www.dawn.com/news/1463203

I believe US fed also plans about 2 interest rate hikes this year....that will have some effect too (on all of us though the degree may be high in Pakistan's case).

Yes, it is expected to have 2 hikes in 2019, down from 3 previously projected. It is going to more dependent on the data given the rate is in the neutral range. What is going to be interesting is that any further hikes will have significant downward impact to the economical uplifting from Trump’s tax cut play, which he will not be appreciated.

Any further rate hikes will also put greater pressure to the developing economies, particularly to the ones with great financial/economical vulnerability. The vulnerability index according to Radobank shows that we haven’t not seen a great deal of change in terms of vulnerability landscape from the previous crisis.

 

[Nilgiri]

Yes, it is expected to have 2 hikes in 2019, down from 3 previously projected. It is going to more dependent on the data given the rate is in the neutral range. What is going to be interesting is that any further hikes will have significant downward impact to the economical uplifting from Trump’s tax cut play, which he will not be appreciated.

Any further rate hikes will also put greater pressure to the developing economies, particularly to the ones with great financial/economical vulnerability. The vulnerability index according to Radobank shows that we haven’t not seen a great deal of change in terms of vulnerability landscape from the previous crisis.

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Cool India is the perfect reference benchmark lol. Sitting pretty in the 0....vanilla cake style.