- IMF official says bailout programme aims to help Pakistan get back on the path to sustainable and more inclusive growth
A senior official of the International Monetary Fund (IMF) has said that the bailout package given to Islamabad is aimed at improving Pakistan’s public financing and reducing public debt, a private media outlet reported on Friday.
“There have been major developments recently, in fact since I was last standing here we have had an agreement at staff level,” said IMF’s Director Communications Gerry Rice while addressing a press briefing.
The IMF official briefed the journalists on the May 12 programme that includes a $6 billion package with a three-year extended fund facility by the IMF to support Pakistan’s economic reforms efforts.
“Just prior to the bailout package, Managing Director Christine Lagarde met with PM Imran Khan,” he said. “Ernesto Ramirez-Rigo is the mission chief and he issued a comprehensive statement I would refer you to that and I won’t get into the details.”
The communication director, however, went on to elaborate on the deal, saying that it was aimed at helping Pakistan get back on the path to sustainable and more inclusive growth and so on.
“We hope that the programme can also create fiscal space for a substantial increase in social spending to strengthen social protection as well as infrastructure and other human capital development.”
An IMF mission, led by Ramirez-Rigo, visited Islamabad from April 29 to May 11 to discuss IMF support for the government’s economic reform programme. The visit was originally scheduled to end on May 10, however, Rigo stayed in Pakistan for one more day to conclude the deal.
According to an IMF press release, the Pakistani authorities and IMF team reached a “staff level agreement on economic policies that could be supported by a 39-month Extended Fund Arrangement (EFF) for about $6 billion.”
The programme, it said, aims to support Pakistan’s strategy for stronger and more balanced growth by reducing domestic and external imbalances, improving the business environment, strengthening institutions, increasing transparency, and protecting social spending.
“Pakistan is facing a challenging economic environment, with lacklustre growth, elevated inflation, high indebtedness, and a weak external position,” the IMF noted in its statement. “This reflects the legacy of uneven and procyclical economic policies in recent years aiming to boost growth, but at the expense of rising vulnerabilities and lingering structural and institutional weaknesses.”
“Decisive policies and reforms, together with significant external financing are necessary to reduce vulnerabilities faster, increase confidence, and put the economy back on a sustainable growth path, with stronger private sector activity and job creation,” the IMF asserted.
It’s totally misleading statement that IMF loan will help Pakistan to come out from its economic crises.
As IMF has been awarding a loan of US $ 6 BILLIONS and it will be given on quarterly basis only after FEDERAL GOVERNMENT Pakistan accepts its harsh conditions and will pay installments only after reviewing quarterly results at the one end
Brotherly muslim country SAUDI ARABIA had just fews days ago confirmed that KSA will provide crude oil to Pakistan amounting to US $ 275 MILLIONS FROM JULY 2019 TO JUNE 2022 ON DEFERRED PAYMENTS WHICH COMES OVER US $ 10 BILLIONS
without any harsh conditions like raise the ELECTRICITY, GAS, PETROLEUM PRODUCT PRICES, WITHDRAWALS OF MANY INCENTIVES GIVEN TO DIFFERENT INDUSTRIAL SECTORS.
Just imagine that Pakistan had debt of over US$ 96 Billions so, how it will help ??????????
US $ 100 BILLIONS QUESTION????
If Pakistan government really interested to come out from economic crises then just announce only few steps out of it only 2 or 3 are mentioned below:-
1. Reduce by 50% remuneration/salary paid to MNAS, SENATORS, MPAS, FEDERAL MINISTERS, PROVINCIAL MINISTERS , GOVERNORS, CHIEF MINISTERS, PRIME MINISTER, PRESIDENT, ALL JUDGES OF SUPREME COURTS, HIGH COURTS, OVER 2 STAR GENERALS, ALL GOVERNMENT OR SEMI GOVERNMENT ORGANIZATIONS.
NOT A SINGLY PENNY TO BE GIVEN TO CHAIRMAN AND MEMBERS OF DIFFERENT STANDING COMMITTEES OF SENATE, NATIONAL ASSEMBLY AND PROVINCIAL ASSEMBLIES.
ALL OFFICERS OF 19 GRADE AND ABOVE ALSO REDUCE BY 50% SALARY AND THEIR PERKS
As IMF will never ask take such steps as because these are the beneficiaries of IMF loan at one end or others.
Remaining steps not written here
The write is professional consultant
The question is how can IMF official talk about growth when the amount is even less than that required to avert balance of payment crises.
Pakistan will still have to tap other sources such as commercial loans and possibly issuing international bonds just to be able to meet import needs and make debt repayments.
The only way to make Pakistani economy stand on its feet is by diversifying our exports.
We should follow china’s strategy of focussing on applied sciences which may result in growth. Modern technical institutions need to be set up.
We should strive to get manufacturing technologies by what ever means possible.
One approach could be to provide huge tax benefits to foreign companies if they transfer technologies.
We have been blessed with plenty of mineral resources. These should be tapped for export. As an example, china is the largest exporter of rare earth minerals which are used in manufacturing cell phones, computer chips and other electronic circuits.
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