Pakistan's Goodbye to IMF

[jha]

indians have more pain then us abut our economy yaar kitny achy hain dekho to sahi .

Kabhi nahi chukte ho ..

 

[Hyde]

lol - the grapes are sour

IMF kicked Pakistan government's *** by refusing to give them more money. Pakistani government kept on taking money and made no improvement as per the IMF plans. They kept on revoking their decisions and the economy didn't improve in all these years. Now since IMF has refused to release the next tranche we are coming up with this foolish news

 

[muse]

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.

Why would currency traders react negatively, why would the Rupee fall in value in relation to the Dollar?

In other words, given the "good news" statistics cited in the article, wouldn't the exact opposite be expected? -- What's wrong with this picture?


Anyway, Pakistan love the IMF and find it difficult to stay for long.

 

[Hyde]

Why would currency traders react negatively, why would the Rupee fall in value in relation to the Dollar?

In other words, given the "good news" statistics cited in the article, wouldn't the exact opposite be expected? -- What's wrong with this picture?


Anyway, Pakistan love the IMF and find it difficult to stay for long.

well its a simple logic,

When the currency slipped from 60 rupees to 85 back in 2008, IMF bailed out Pakistan and the dollar frozen between 80-85 for the last 3 years. Now the IMF will no longer bail out Pakistan and the currency will start devaluing as long as Pakistan does not find another alternative to bail out its blowing economy or make significant improvements itself.

and it is not that the Rupee will only be devalued when there is something wrong in Pakistan. It can also be devalued when something good happens in the USA. See the Dollar also gained strength against Euro, GBP and JPY last week.

 

[Imran Khan]

Kabhi nahi chukte ho ..

tum log bhi hamari jan chor do ab .itny paap nhi kiye jitni saza mil rahi hai . bunkrupt poor economy bailout saas bahu ke rishty naty gher gehr ki kahani sab to le ayee ho is mamly main .

 

[Abu Zolfiqar]

IMF is least preferred option. It is like the emergency ward. Nobody want to be there unless they HAVE to be. In our case, our Forex/reserve position is fairly stable now....stable as stable can be, despite the unfavourable political/security environment.

no country in the world enjoys the harsh conditions imposed by IMF --- more often than not they are politically unpopular decisions which can fuel unrest --which in Pakistan's case, that is why we failed over 8 conditions posed.


basically, Pakistan is giving IMF the finger and saying if and until we need you again -- f*ck off.


and quite frankly, we should NEVER approach them again in the future. BUTTTTT we should (for our own sake) undertake reforms which will benefit the country


among them


---taxation reforms & increasing the tax base

---gradually imposing a value-added tax regime (we HAVE to do it)

---power sector reforms; crushing the circular debt which has been haunting the power companies, the energy suppliers (and of course the common man)

 

[Hyde]

and quite frankly, we should NEVER approach them again in the future. BUTTTTT we should (for our own sake) undertake reforms which will benefit the country


among them


---taxation reforms & increasing the tax base

---gradually imposing a value-added tax regime (we HAVE to do it)

---power sector reforms; crushing the circular debt which has been haunting the power companies, the energy suppliers (and of course the common man)

Are these not the same conditions that IMF was trying to impose on us? what is the difference between these and IMF conditions that we failed to implement?

 

[RiazHaq]

indians have more pain then us abut our economy yaar kitny achy hain dekho to sahi .

Talking about current account balances, Pakistan has now been running surpluses while India continues to run deficits for last several quarters.

India Current Account

Pakistan Current Account

 

[danger007]

i wish you won't bail out bcz china was their for you. dump those politicians in next elections. get rid off them.

 

[RiazHaq]

Why would currency traders react negatively, why would the Rupee fall in value in relation to the Dollar?

In other words, given the "good news" statistics cited in the article, wouldn't the exact opposite be expected? -- What's wrong with this picture?


Anyway, Pakistan love the IMF and find it difficult to stay for long.

To get your answer, read on to the following:

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

 

[danger007]

Talking about current account balances, Pakistan has now been running surpluses while India continues to run deficits for last several quarters.

India Current Account

Pakistan Current Account

ohhh god again here it goes trolling. why u cursed India man.. don't bring India now atleast.

 

[RockyX]

Talking about current account balances, Pakistan has now been running surpluses while India continues to run deficits for last several quarters.

India Current Account

Pakistan Current Account

This is not complete picture. Should i tell about Indian economy ? I will only give 2 points.

Don't compare with India. India is giving aid some 10 billion $ to few countries.

In Last 5 years, Our GDP reached 1.7 trillion from 850 Billion $. Our GDP growth per year is more than size of Pakistan GDP.

4%-5% Fiscal deficit is useless when GDP growth is 7%-10% consistent for last 10 years. We maintain some flexibly for some extra expenses specially in Infrastructure development, Defence Modernization, various social welfare programme, etc.

 

[RockyX]

IMF programme:

Pakistan has asked for 11 bailouts in the past two decades against India's one bail out way back in 1991. It is one of the biggest AID recipient from United States, second only to Israel.

1/3rd money of the budget goes to Debt servicing. And another 20% for Military and run the country with the rest.

So, Don't compare with India. Stick to the topic.

 

[RiazHaq]

This is not complete picture. Should i tell about Indian economy ? I will only give 2 points.

Don't compare with India. India is giving aid some 10 billion $ to few countries.

In Last 5 years, Our GDP reached 1.7 trillion from 850 Billion $. Our GDP growth per year is more than size of Pakistan GDP.

4%-5% Fiscal deficit is useless when GDP growth is 7%-10% consistent for last 10 years. We maintain some flexibly for some extra expenses specially in Infrastructure development, Defence Modernization, various social welfare programme, etc.

Ok, let's not forget the massive US aid that saved hundreds of millions of Indians by the Green Revolution in 1960s and 1970s and later with the IMF bailout of India in 1991.

To put it perspective, here's an excerpt from a 1992 paper Foreign Aid and India:
Financing the Leviathan State by Shyam J. Kamath:

India has received more foreign aid than any other developing nation since the end of World War II--estimated at almost $55 billion since the beginning of its First Five-Year Plan in 1951

Beyond that, India was the fourth largest recipient of aid (ODA) between 1995 to 2008 (US$26.1 billion).

After the increase of British aid to $500 million (300 million pounds) a year, India will still remain the biggest recipient of Japan's official development assistance (ODA) in the near future. Since Japan's first ODA to India in 1958, the country has received monetary aid worth Rs 89,500 crore (Rs 895 billion) so far, according to Noro Motoyoshi, Japanese consul general in Kolkata. In 2008, Japan's ODA to India was up by more than 18% compared to 2007 at Rs 6916 crore (Rs 69.16 billion).

The World Bank said recently it will lend India $14 billion in soft loans by 2012 to help the country overhaul its creaking infrastructure and increase living standards in its poor states, according to Financial Express.

At the recent G20 meeting, India has asked the World Bank to raise the amount of money India can borrow as soft loans, generally considered aid, from the bank for its infrastructure projects, according to Times of India. At present, India can borrow up to $15.5 billion in soft loans as per the SBL (single borrower limit)in soft loans fixed by the Bank.

The Indian government has estimated it needs $500 billion over the five years to 2012 to upgrade infrastructure such as roads, ports, power and railways.

India would get ZERO direct or indirect aid if the US did not agree, given the extraordinary power the US has over its allies like the UK and Japan and the IFIs like IMF and WB.

Haq's Musings: Foreign Aid Continues to Pour in Resurgent India

 

[Luftwaffe]

RiazHaq, but then again Pakistan is a small economy and that too in very bad condition we as a Agriculture nation haven't input technology in our agriculture sector unlike Japan, China, US, Canada, Australia and so on.

Do you know in Canada same land is prepared 3 time a year for agri products the magic is technological input and machines thus the out come of agri products in the market is more for exports and internal usage. 64th year of Pakistan and we are using the same old agriculture techniques, how do we even call Pakistan an agriculture country.