Pakistan's Goodbye to IMF

[RiazHaq]

Citing significant improvements in Pakistan's current account balance, Pakistan's Finance Minister Dr Abdul Hafeez Shaikh has said that his government would not waste its energy on reviving the currently suspended IMF program that began in 2008, or seek a new IMF bailout, according to a report in Pakistan's Dawn newspaper.

Pakistan's decision follows the latest State Bank report of a current account surplus equivalent to 604 Million USD in the second quarter of 2011.



The surplus is the result of rising exports from Pakistan and growing remittances from Pakistani diaspora, the 7th largest in the world.

Pakistan's exports in the first two months of the current fiscal year (2011-12) surged by 20.26 percent over the corresponding period of last year. Exports during July-August (2011-12) were $4,167 million as compared to the exports of 3,465 million during July- August (2010-11, according to a GeoTV report citing data from Federal Bureau of Statistics (FBS).

According to official data as reported by Reuters, remittances rose 40.45 percent to $1.31 billion in August 2011, compared with $933.06 million in the same period last year.

Currency traders reacted negatively to the government's decision to part ways with the IMF as the Pakistani rupee hit its second record low against the dollar in two days on Friday, touching 87.92 before firming to 87.75/78 at the close.

Some analysts believe that the timing of the decision to free itself from the IMF is motivated by the ruling party's desire for more spending on populist programs to impress its voters before the coming elections. This is likely to make the budget deficits worse in the absence of IMF's demands for reforms to cut spending and raise revenues to narrow Pakistan's budget deficits to 4.5% of GDP.

Haq's Musings: Pakistan to Terminate IMF Bailout Early

 

[Veritas]

Unfortunate how Political parties are willing to mis-use the people's monies into populist schemes that would leave the country insolvent in the long run. On top of it these populist schemes are pay-outs to the ruling parties rank and file so that they are rewarded for the current and future support.

 

[Luftwaffe]

The reality is IMF has refused to provide Pakistan with more loans, this insult has prompt Pakistani Govt to issue a statement to cover up the insult.

Let the World know in 3.5 Years Pakistan has received almost $22 Billion.

Here read this a few months old but does proves that IMF is sick and tired of Pakistani Govt borrowing with almost no replyment.

ISLAMABAD: The man who pleaded Pakistan’s case in the International Monetary Fund (IMF) Board for enhancing the bailout package limit from $7.6 billion to $11.3 billion now regrets the decision to go for a larger loan.

“I made a mistake in arguing for the augmentation in the IMF board, and also got the IMF to allow us to use a part of the 2009 August tranche as a bridging loan for budgetary spending,” wrote Dr Ehtisham Ahmed, Pakistan’s former representative in the IMF board, in an email to a business tycoon and an economist.

In August 2009, the IMF augmented the size of Pakistan’s standby arrangement programme to $11.3 billion $3.7 billion more than approved in November 2008. Pakistan had sought the increase and permission to use a portion of it for budget financing after the Friends of Democratic Pakistan refused to provide a promised loan.

According to Dr Ahmed, “We are currently unable to repay the IMF for the $8 billion already borrowed. We will soon be looking for debt relief.”

 

[DelhiDareDevil]

why cant asia bank or india, japan or china help to bail out Pakistan poor economy?

 

[Veeru]

Pakistani rupee hits fresh record low of 87.92 to dollar

By Sahar Ahmed

KARACHI, Sept 16 | Fri Sep 16, 2011 8:54am EDT

(Reuters) - The Pakistani rupee hit its second record low against the dollar in two days on Friday, touching 87.92 on increased import payments and pessimism about the country's economic outlook before firming to 87.75/78 at the close.

The rupee had ended Thursday's session at 87.61/66 after hitting its previous record low of 87.82.

"The rupee traded at 87.92 per dollar and there were import payments amounting to around $200 million," said a currency dealer at a foreign bank.

Analysts said further weakness was likely over the current fiscal year.

"Our forecasts are for rupee to end 2011 at 89 levels and touch 92 levels by June 2012," said Sayem Ali, economist at Standard Chartered Ltd.

Though there were some inflows especially of remittances from Pakistanis working abroad, dealers said negative sentiment about Pakistan's economy was affecting the local unit.

According to official data, remittances rose 40.45 percent to $1.31 billion in August, compared with $933.06 million in the same period last year.

Pakistan faces a new crisis as monsoon rains which have killed more than 230 people sweep through the southern province of Sindh.

Floods have caused only minor damage to the sugarcane and rice crops, officials said, though weeks of downpours have already destroyed about 13 percent of the crucial cotton crops.

Stalled payments from an International Monetary Fund (IMF) bailout programme are also hurting the rupee.

The IMF has criticised the Pakistan government for its patchy implementation of fiscal reforms and has held back the sixth tranche of an $11 billion loan since August last year. Pakistan is due to start repaying the loan and its interest from early next year.

IMF and Pakistan officials were due to meet in July, but the talks were delayed and no new date announced. However they are scheduled to meet next week for the annual World Bank-IMF meetings in Washington.

Pakistani rupee hits fresh record low of 87.92 to dlr | Reuters

 

[mitth]

Good decision thanks God that our politician good thing............
[video]http://paktribune.com/news/Pakistan-says-goodbye-to-IMF-for-the-time-being-243694.html[/video]

 

[jha]

As Luftwaffe correctly pointed out, It is IMF which is reluctant to give any more loan to Pakistan..
They had made few suggestions for Tax reforms but the govt. is not ready for them..Without Tax reforms, Pakistan will not be able to pay back.

 

[Veeru]

pakistan's decision for not going for IMF is more to do with the fact the IMF is not ready to provide more loeans to it.

Also, IMF asks pakistani govt. to take some steps to improve the economy and govt. don't wanna take that steps.

And in the end if you take loan you have to return it with interest and pakistan is yet to start paying for the last loan.

 

[Luftwaffe]

why can asian bank or india, japan or china help to bail out Pakistan poor economy for?

O Bhai because Pakistan can't repay we have no solid industries and public service sector, After Pakistani Govt ate away $22 billion in 3.5 years you would still want to give something to Pakistani Government.

 

[Veeru]

The reality is IMF has refused to provide Pakistan with more loans, this insult has prompt Pakistani Govt to issue a statement to cover up the insult.

Let the World know in 3.5 Years Pakistan has received almost $22 Billion.

Here read this a few months old but does proves that IMF is sick and tired of Pakistani Govt borrowing with almost no replyment.

ISLAMABAD: The man who pleaded Pakistan’s case in the International Monetary Fund (IMF) Board for enhancing the bailout package limit from $7.6 billion to $11.3 billion now regrets the decision to go for a larger loan.

“I made a mistake in arguing for the augmentation in the IMF board, and also got the IMF to allow us to use a part of the 2009 August tranche as a bridging loan for budgetary spending,” wrote Dr Ehtisham Ahmed, Pakistan’s former representative in the IMF board, in an email to a business tycoon and an economist.

In August 2009, the IMF augmented the size of Pakistan’s standby arrangement programme to $11.3 billion $3.7 billion more than approved in November 2008. Pakistan had sought the increase and permission to use a portion of it for budget financing after the Friends of Democratic Pakistan refused to provide a promised loan.

According to Dr Ahmed, “We are currently unable to repay the IMF for the $8 billion already borrowed. We will soon be looking for debt relief.”

Yes sir ur right.



IMF refuses talks with cash-starved Pakistan

ISLAMABAD: Amid a snowballing economic crisis, the International Monetary Fund (IMF) on Monday refused to send a mission to Pakistan for talks on restoring the $11.3 billion-dollar bailout package.

The IMF took the decision after Islamabad failed to hold out a firm commitment to implement tax and power sector reforms.

A pre-review IMF mission, led by its Director for the Middle East and Central Asia Department Masood Ahmed, held separate meetings with President Asif Ali Zardari, Prime Minister Yousaf Raza Gilani and Finance Minister Dr Abdul Hafeez Shaikh.

“After getting negative signals at the highest level, the IMF delegation refused to send a mission for talks with Islamabad,” a finance ministry official told The Express Tribune on condition of anonymity.

The delegation said that mission-level talks would only be held if the reformed general sales tax (RGST) was levied from March 1 and fiscal slippages were controlled. However, the government insisted that the implementation should be delayed till July.

“Pakistan had pinned high hopes on President Barack Obama’s senior adviser David Lipton, but he, too, asked the government to implement economic reforms,” said another finance ministry official who attended the talks.

Lipton had visited Islamabad last week to urge the government to carry forward the reforms agenda.

IMF refuses talks with cash-starved Pakistan – The Express Tribune

 

[WAQAS119]

pakistan's decision for not going for IMF is more to do with the fact the IMF is not ready to provide more loeans to it.

Also, IMF asks pakistani govt. to take some steps to improve the economy and govt. don't wanna take that steps.

And in the end if you take loan you have to return it with interest and pakistan is yet to start paying for the last loan.

It seems your whole life is dedicated for posting non sense

 

[DelhiDareDevil]

O Bhai because Pakistan can't reply we have no solid industries and public service sector, After Pakistani Govt ate away $22 billion in 3.5 years you would still want to give something to Pakistani Government.

Yaar stop acting Pakistan is the only one, India is better then Pakistan at this field and everyone knows this.

 

[RoYaL~GuJJaR]

pakistan's decision for not going for IMF is more to do with the fact the IMF is not ready to provide more loeans to it.

Also, IMF asks pakistani govt. to take some steps to improve the economy and govt. don't wanna take that steps.

And in the end if you take loan you have to return it with interest and pakistan is yet to start paying for the last loan.

That is true ......

As always twisting the facts by nit picking from here and there....! eh!

 

[Veeru]

O Bhai because Pakistan can't reply we have no solid industries and public service sector, After Pakistani Govt ate away $22 billion in 3.5 years you would still want to give something to Pakistani Government.

Sir,

pakistan can provide safer route to Afghanistan/Iran, pakistan can provide sand/cement India can build power plants in pakistan or seports in pakistan or India can train pakistani people for skill up gradation in MSME (Micro, Small and Medium Enterprises) or India can build metro.

If we both countries sit together with coll head and saner mind everything is possible.

Then there is no need of IMF, world bank or USA.

---------- Post added at 11:57 PM ---------- Previous post was at 11:55 PM ----------

It seems your whole life is dedicated for posting non sense

Care to post anything other then one liner in this thread???????????

My post is backed with the facts and the pakistani source not my words.

 

[jha]

Sir,

pakistan can provide safer route to Afghanistan/Iran, pakistan can provide sand/cement India can build power plants in pakistan or seports in pakistan or India can train pakistani people for skill up gradation in MSME (Micro, Small and Medium Enterprises) or India can build metro.

If we both countries sit together with coll head and saner mind everything is possible.

Then there is no need of IMF, world bank or USA.

---------- Post added at 11:57 PM ---------- Previous post was at 11:55 PM ----------



Care to post anything other then one liner in this thread???????????

My post is backed with the facts and the pakistani source not my words.

Isn't that a very rosy picture you are posting..? Unless this Afghansitan problem is sorted out, i have my share of doubts about the Pakistan's economy..And the way Talibans are regrouping, chances of mining in Afghanistan is not that bright..
Chhabar is better route for us..