IMF considers Pakistan economic teams deceitful, liars
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Abdussamad
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Its not the money. Its their seal of approval. If they don't give us that our economy will collapse.
Not really. This myth has been exposed many times.
Abdussamad
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And yet the article says exactly that. We need their "letter of comfort" to be able to take loans from OTHER sources. Without their nod of approval no one will give us the money we need to pay off our other debts.
There are many other sources of revenue for Pakistan. There are also other alternative sources of loans, aid for Pakistan besides the IMF. So your argument is totally moot.
Abdussamad
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WTH? I just mentioned above that all those alternative loan sources look to the IMF for their nod of approval before they agree to give us money. I mean why can't you understand that? Whether it be the World Bank, the ADB, the Islamic Development Bank or even the capital markets (mentioned in another thread) they all look at what the IMF has to say. How else do you think the IMF weilds so much power?
Does China or any other country look to the IMF to give loans to Pakistan?
JayAtl
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Chinese already gave you a loan for 1 billion in 2008 . that ATM machine ain't gonna pay up anymore and no 'other' country will give you aid ( everyone is strapped in this economy. ) honestly , you continuing to argue w/ Abdussamad, who seems much more savvy about economics, is making you look foolish
Digging a deeper hole: The risky strategy of borrowing to pay off loans – The Express Tribune
PeacefulIndian
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Even with this didn't IMF agree to give that 'Letter of comfort' to Pakistan to clear their way for KL bill money and other sources?
I am hearing Pakistan will get that letter.
I am hearing Pakistan will get that letter.
Pfpilot
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No one is giving a loan to a country so completely directionless that even a complete novice can figure that any money given to Pakistan would never be returned. The government needs to drastically cut spending, and not only from infrastructure related things that are nessecary for long term stability, but from the bureaucracy...Zardari and co keep a sizable percentage of these loans for themselves and then use tax payer money to pay them off. The lack of efficiency and transparency in the government essentially dooms us to a nonstop cycle of loans as whatever percentage of the loans are left over after repayment of other loans and the money kept by politicians, it is not enough to stimulate the economy.
Add to that, not enough people pay taxes and the ones that do, many don't declare their actual assets, there needs to be some sort of inflow of revenue, but no one is willing to let it come out of their pocket.
Add to that, not enough people pay taxes and the ones that do, many don't declare their actual assets, there needs to be some sort of inflow of revenue, but no one is willing to let it come out of their pocket.
Kyusuibu Honbu
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Its kinda surprising for a body like IMF which keeps itself off politics,using such strong words
Zeeshan360
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When a limit is crossed such things happen .
I do accept that IMF shoule have restricted itself from using such harsh words .
But when u lend money and the other party doesnt pays it even after many reminders what would have been u r behaviour ?
hembo
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Can the IMF make Pakistan collect taxes?
Posted By David Bosco Wednesday, April 27, 2011 - 10:26 PM
A delegation of senior Pakistani finance officials was in town last week for talks with U.S. officials and with the International Monetary Fund and World Bank. From the IMF's perspective, the key issue was whether Pakistan has complied adequately with the conditions the Fund placed on Pakistan's existing loan package. At the very top of the agenda is tax revenue--specifically, whether the Pakistani government collects enough of it.
Pakistan has a poor record on that front: it collects less in taxes as a percentage of its overall economy than almost any other country its size. Tax revenue comprises less than 10 percent of GDP, on par with Haiti. Whole swathes of the economy are not covered by the tax system, and the government doles out enormous subsidies for electricity consumption and to public enterprises.
All of this is the IMF's business because Pakistan sought and received support from the Fund during its 2008 financial meltdown, when high oil prices wiped out reserves and inflation hit 25 percent. The IMF initiated a multi-billion dollar assistance package, which was to be disbursed in several tranches and was conditioned on fiscal and economic reforms. The Pakistanis made some initial progress, but by 2010 reforms had faltered. The IMF stopped disbursing funds last summer.
In an agreement designed to revitalize the loan program, Pakistan pledged to institute a new value-added tax system and to crack down on those individuals and companies that do not file tax returns. Since then, there's been progress in a few areas, but nothing like the IMF had hoped. An attempt at the end of last year to push through a package of key reforms mostly foundered. Recent media reports suggest that Pakistan will miss even its modestly increased target for tax revenue this year.
An IMF official confirmed to me yesterday that a senior Fund mission will visit Pakistan in May to discuss the 2011-2012 budget and review developments. "This budget is a cornerstone of putting Pakistan's economy on a more solid and safe basis going forward," the official said. For the moment, Pakistan has a bit of fiscal breathing space. The prices of key textile exports have been high. Remittances from abroad have also reached record levels, perhaps because many Pakistanis in the turbulent Arab world are sending home savings for safekeeping. But the rise in world fuel prices could quickly erode that buffer, making further IMF funds essential.
For the moment, the IMF staff has significant leeway in managing these negotiations. The Fund's executive board--comprised of national representatives--has not tried to micromanage the negotiations as it has occasionally done in the past. While some board members are skeptical of the program, there appears to be consensus among major IMF shareholders that Pakistan's finances are not yet a lost cause.
If Pakistan veers toward financial collapse, key board members--and the United States above all--could insert themselves more directly into the negotiations. Pakistani officials would no doubt insist that financial collapse wouldn't serve U.S. strategic interests and could create an opening for extremists. Trying to play the Americans against the Fund's staff is not a terrible strategy. In the 1990s, Washington intervened repeatedly with the IMF on Russia's behalf to loosen conditions the Fund had imposed. But for all its importance, Pakistan is not Russia, and Washington's reserves of good will are already quite low.
Posted By David Bosco Wednesday, April 27, 2011 - 10:26 PM
A delegation of senior Pakistani finance officials was in town last week for talks with U.S. officials and with the International Monetary Fund and World Bank. From the IMF's perspective, the key issue was whether Pakistan has complied adequately with the conditions the Fund placed on Pakistan's existing loan package. At the very top of the agenda is tax revenue--specifically, whether the Pakistani government collects enough of it.
Pakistan has a poor record on that front: it collects less in taxes as a percentage of its overall economy than almost any other country its size. Tax revenue comprises less than 10 percent of GDP, on par with Haiti. Whole swathes of the economy are not covered by the tax system, and the government doles out enormous subsidies for electricity consumption and to public enterprises.
All of this is the IMF's business because Pakistan sought and received support from the Fund during its 2008 financial meltdown, when high oil prices wiped out reserves and inflation hit 25 percent. The IMF initiated a multi-billion dollar assistance package, which was to be disbursed in several tranches and was conditioned on fiscal and economic reforms. The Pakistanis made some initial progress, but by 2010 reforms had faltered. The IMF stopped disbursing funds last summer.
In an agreement designed to revitalize the loan program, Pakistan pledged to institute a new value-added tax system and to crack down on those individuals and companies that do not file tax returns. Since then, there's been progress in a few areas, but nothing like the IMF had hoped. An attempt at the end of last year to push through a package of key reforms mostly foundered. Recent media reports suggest that Pakistan will miss even its modestly increased target for tax revenue this year.
An IMF official confirmed to me yesterday that a senior Fund mission will visit Pakistan in May to discuss the 2011-2012 budget and review developments. "This budget is a cornerstone of putting Pakistan's economy on a more solid and safe basis going forward," the official said. For the moment, Pakistan has a bit of fiscal breathing space. The prices of key textile exports have been high. Remittances from abroad have also reached record levels, perhaps because many Pakistanis in the turbulent Arab world are sending home savings for safekeeping. But the rise in world fuel prices could quickly erode that buffer, making further IMF funds essential.
For the moment, the IMF staff has significant leeway in managing these negotiations. The Fund's executive board--comprised of national representatives--has not tried to micromanage the negotiations as it has occasionally done in the past. While some board members are skeptical of the program, there appears to be consensus among major IMF shareholders that Pakistan's finances are not yet a lost cause.
If Pakistan veers toward financial collapse, key board members--and the United States above all--could insert themselves more directly into the negotiations. Pakistani officials would no doubt insist that financial collapse wouldn't serve U.S. strategic interests and could create an opening for extremists. Trying to play the Americans against the Fund's staff is not a terrible strategy. In the 1990s, Washington intervened repeatedly with the IMF on Russia's behalf to loosen conditions the Fund had imposed. But for all its importance, Pakistan is not Russia, and Washington's reserves of good will are already quite low.
Nair saab
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Decrease ur spending by importing refined petrolium & other products from India & Increasing exports to India...this will lead to Decrease in tension with India hence reducing the Defence expenditure also...
Increase the sale tax, service tax & start new taxes like VAT...start spending on business which will give good returns like Improving Railways...try to give a way to export Indian products to central Asia...this will generate a huge amount of money from transit fees...
Increase the sale tax, service tax & start new taxes like VAT...start spending on business which will give good returns like Improving Railways...try to give a way to export Indian products to central Asia...this will generate a huge amount of money from transit fees...
Zeeshan360
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Saying is easy , doing is difficult
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