Oct 102018
 
Govt flayed for approaching IMF

LAHORE: JI ameer Sirajul Haq lambasted PTI government for approaching IMF in total disregard of its election promises. Addressing a meeting of central office-bearers of JI’s sister bodies at… [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Click for detailed story

Oct 092018
 
Pakistan and the IMF

Pakistan is set to seek the 22nd IMF bailout package. Other than exploiting our strategic location and becoming a client state, no effort was made for the economic revival by any government. The Quaid’s vision of a democratic welfare state can be turned into reality if constitutional supremacy prevails in the country. The outflow of foreign exchange by a few hundred public officers and traders through regular and irregular channels exceeds the total remittances sent by Pakistanis employed in Gulf states.Why cannot we emulate the policies that were adopted by India which has banned the imports of luxury items and embarked on achieving self-sustainability, adopting austerity measures with emphasis on indigenous industrial growth? India invested in human resource development, seeking help from America’s MIT in 1949, while we chose to rely on imports.When individuals and institutions become more powerful, the state becomes dysfunctional followed by currency devaluation and the rise in inflation.Ali Malik TariqLahore Click for detailed story

Oct 232017
 
Economic security

This refers to the article, ‘Unsound projects’ (Oct 22), by Dr Farrukh Saleem. The writer has pointed out a few projects whose cost has been escalated due to the inefficiency of those who were entrusted with the responsibility of managing these projects. A few examples of such projects that are called ‘unsound’ by the writer are: The 27-kilometre Orange Line train in Lahore – a project that is expected to result in an annual loss of Rs14 billion. The Sahiwal Coal Power Project whose cost is estimated at $956 million of which $723 million is debt. The New Islamabad Airport project that has gone from Rs37 billion to over Rs100 billion and hasn’t been completed to date. The writer has rightly said that there is no need of using missiles, tanks and other weapons of war against one’s enemy. Unsound economic projects, enforced austerity by the IMF and massive debt are all sufficient to do the job and can be termed as the new weapons of war. So before the country is buried under further layers of debts, wouldn’t it be prudent if some sort of check is imposed on such misadventures? The best check would be through the formation of a national security council under the supervision of the PM, where all these projects should be discussed. This council should approve a project after analysing it from every angle. Air-Cdre (r) Azfar A Khan (Karachi) Click for detailed story

Sep 212017
 
Our economy

The external debt is now exceeding $80 billion and the domestic debt has risen by more than three times. The right question which policymakers should ask each other is that whether the country can avoid the borrowing spree that has hugely accelerated during the past four years. The nation is caught in a serious debt trap. The government has been tapping all available avenues for funding – the IMF, concessional financing from bilateral sources, multilateral institutions and commercial borrowing from open market. Even if the prime minister decides not to approach the IMF, his government will be raising expensive borrowing from the commercial sources to bridge the huge trade gap that remains unaddressed. The country also has a plan to float $1 billion in sukuk – Islamic bonds. The growth achieved during the last few years is externally-driven. The liquidity provided by loans has been squandered on unproductive imports to project a false sense of prosperity. Under the prevailing situation, no one should absolve themselves from the prevalent economic mess. On the other hand, everyone must share the blame for the poor economic management. Kulsoom Arif (Karachi) Click for detailed story

Jul 082017
 
Economy in decline

The squandering of precious foreign exchange on the import of luxury items is baffling. The ostentatious lifestyle of the elite class is ruining the economy. Because of liberal import policy, where all kind of stuffs are permitted to be imported, the country is currently dealing with the highest current account deficit of $8 billion. Preference of foreign goods over local manufactures exhibits a strange mindset of the rulers. India’s and the US respective slogans of ‘Make in India’ ‘America First’ are huge contrast to the approach of our government. Back in 1999, the country was close to a financial default as the reserves had plummeted to an all time low. If the current trend continues, the same economic mayhem will become inevitable. The government is borrowing as much money as possible to bridge the current account gap. The country has been pushed into a serious debt trap while the free reserves of the State Bank have fallen to just over $16 billion and the decline is continuing. The rupee is under tremendous pressure but the float is being managed. A hefty devaluation is expected in 2018 with a return to the IMF on account of the worsening economic situation. Shoaib Karachi Click for detailed story

May 252017
 

ISLAMABAD: Pakistan’s losses from war on terrorism surged past $123 billion in addition to the loss of thousands upon thousands of human lives since it joined the global fight against extremism but it is still struggling to get the world community to properly recognise its sacrifices. The cost of war against terrorism rose to $123.1 billion with an addition of $3.9 billion in the outgoing fiscal year alone, said Finance Minister Ishaq Dar on Thursday at the launching of the Economic Survey of Pakistan for outgoing fiscal year 2016-17. Although the amount of losses is significant when compared with its impact on public finances and national economy, the downward trajectory in annual additional losses marks an improvement in the overall security situation. PML-N will not need another IMF bailout, says Dar The yearly losses of $3.9 billion were $2.6 billion or 40 per cent less than the cost incurred by the country in the previous year, reflecting positive change as a result of the Operation Zarb-e-Azb. The losses are lowest recorded in any single year over the past 12 years. “Pakistan is fighting the war in a dignified manner and is not seeking financial support from other countries, although the government is bearing the annual cost of Rs100 billion after the launch of Operation Zarb-e-Azb, said the finance minister. ‘Upcoming budget can make or break Pakistan’s economy’ He said that the government has also raised 57 wings of civilian armed forces to consolidate gains made by the armed forces. Dar said [Read More…]

Apr 302017
 
World Bank?s help

In an attempt to improve the renewable energy sector in Pakistan, World Bank President Dr Jim Yong Kim has offered the institution’s technical and financial help in technological improvements. The president also recognised the successful completion of the IMF programme. The president was informed that the country has undertaken projects like the Pakistan Development Fund and the Pakistan Infrastructure Bank in order to maintain higher growth trajectory. The WB has also offered its support for the country’s hydropower projects to direct the country towards the path to progress. Baba Faiz Bal Nigwar Click for detailed story

Apr 102017
 
Bleak picture

This refers to the editorial, ‘Consultations with the IMF’ (Apr 10). One wonders how long the IMF and other multilateral financial institutions will remain satisfied with explanations given by Pakistan for its high budget deficit. The IMF is aware of the fact that the health of the country’s economy is bad, notwithstanding what the government claims. So far, it has accepted the narrative of the government. The external sector stands devastated. The trade deficit during the first nine months – July to March – has already crossed the $20 billion mark. Coupled with declining remittances and moderate increases in the FDI, the current account will experience a gap of $6 billion which is almost double the volume of the previous year. Shortfall in revenue collection and increase in current expenditure is causing a higher budget deficit, which is being partially offset by an ill-advised cut in development expenditure. Taking into account the pending refunds of the business community and the power sector circular debt, which is outside the budget, the deficit will be much higher than 4.1 percent of the GDP. The figure also reflects the stagnant performance of our agriculture and manufacturing sectors. Fiscal indiscipline, mismanagement of the external sector and energy shortfalls are posing major challenges. The worst is yet to come. Arif Majeed Karachi Click for detailed story