Pakistan goes to beg IMF.

Discussion in 'Pakistan' started by Blackwater, Jun 19, 2013.

  1. Blackwater

    Blackwater Veteran Member Veteran Member

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    Pakistan seeks IMF bailout


    ISLAMABAD, June 18: Pakistan and the International Monetary Fund (IMF) are opening on Wednesday week-long discussions on Islamabad’s latest fiscal and macroeconomic adjustments and its request for a possible $5 billion bailout package for repayment of the fund’s outstanding loans.

    A senior official of the ministry of finance said the government had made a fiscal adjustment of about 2.5 per cent of GDP in its budget for 2013-14 to reduce fiscal deficit from 8.8pc to 6.3pc of GDP during the next financial year and hoped it would convince the IMF into agreeing on a new Extended Fund Facility (EFF) of about $5bn repayable in 10 years.

    Pakistan’s top priority during the talks will be to secure a letter of comfort from the IMF to pave the way for resumption of programme loans by the World Bank and the Asian Development Bank held up since 2009 after suspension of the IMF programme on failed reforms.

    Pakistan will also brief the IMF mission on its plans to settle over Rs503bn of energy sector circular debt before the middle of August and a roadmap to restructure the power sector and further fiscal adjustment of 1.3pc of GDP in 2014-15 and 1pc of GDP in 2015-16 to bring down fiscal deficit to about 4pc of GDP.

    The official said that as part of preparations for talks with the IMF, the government has decided to avoid quarterly increases in electricity and gas tariffs — an old demand of the fund to bring energy prices to market-based tariffs by eliminating all subsidies.

    Finance Minister Ishaq Dar told journalists recently that the IMF mission would remain in Pakistan from June 19 to July 3 for substantive talks and post-programme monitoring of the existing programme but a senior official said the talks were expected to be concluded by June 26.

    The two sides are required to hold biannual review of Pakistan’s economic situation as part of Post-Programme Monitoring (PPM). At the end of discussions, Pakistan is expected to make a formal request to the IMF for a new EFF programme. The mission will submit Pakistan’s request as well as its assessment report to the IMF executive board.

    The official said the authorities were comfortable with foreign exchange reserves till the end of July even after repayment of about 450m special drawing rights (IMF currency) – about $675m.

    However, the authorities are not comfortable about some heavy repayments due to the IMF in October-November when Pakistan has to repay 1.685m SDRs ($2.5bn) that could reduce reserves to a critical level and put pressure on exchange rate.


    Pakistan seeks IMF bailout - DAWN.COM
     
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  3. Blackwater

    Blackwater Veteran Member Veteran Member

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    Govt has changed but not their begging habits.:rofl::rofl::rofl::rofl:


    why dont they go to all weather friend china for $$$$$???? :p:p:p
     
  4. sayareakd

    sayareakd Moderator Moderator

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    why IMF should fund them, they can use the same funds they are pumping to make nukes.
     
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  5. Blackwater

    Blackwater Veteran Member Veteran Member

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  6. ladder

    ladder Senior Member Senior Member

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    This is serious.
    4 yr is a long time.
    IMF will surely want stricter reforms this time.
     
  7. pankaj nema

    pankaj nema Senior Member Senior Member

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    Both China and Saudi Arabia have refused to give any easy money

    They will give a few loans AFTER Pakis enter into an IMF programme

    China has recently given a loan 448 Million US $ for A Dam

    It was being RUMOURED that Saudis were willing to give Billions because Nawaz is their own man

    But those rumours were being deliberately spread to boost the KSE
     
  8. pankaj nema

    pankaj nema Senior Member Senior Member

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    IMF conditionalities are so severe that Pakis have to report to the IMF
    ALL the Loans that Paki govt takes after entering into an IMF Programme
    even from Saudi and China

    IMF has to ensure that it gets its money back
    and IMF does not want that the borrower will default at the time of repayment

    Once a country gets into a programme it looses its economic sovereignity

    This time US Helping hand is NOT there

    Last loan was sanctioned after US state dept and white house did some heavy lifting on the behalf of Pakis

    IMF letters are necessary for any other loan from ADB ; WB
     
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  9. pankaj nema

    pankaj nema Senior Member Senior Member

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    What is most interesting is the END of Paki credibility and excuses for their
    Poor Economy

    In 2008 when Last IMF Loan was taken Pakis had a little sympathy left because of this so called WOT

    But now even the Saudis and Chinese have deserted them

    Pakis were sure of Saudi assistance and were hoping that with Saudi Help they could delay
    the harsh IMF programme
     
  10. sayareakd

    sayareakd Moderator Moderator

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    uncle will say, we have given you, your new national bird what else you want.
     
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  11. Waffen SS

    Waffen SS New Member

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    How long China can pull their unemployed brother Pakistan? :rofl::p It will be great if IMF also refuses to give.

    [​IMG]
     
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  12. Blackwater

    Blackwater Veteran Member Veteran Member

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    Pakistan's external debt is almost 5 times its forex reserves.. ($ 60 billion debt vs $ 11 billion forex reserves)

    :rofl::rofl::rofl::rofl::rofl::rofl:
     
  13. farhan_9909

    farhan_9909 Tihar Jail Banned

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    well this was expected considering the past 5 years under PPP..
    though as Dr farooqi said the case would be different in this govt case
     
  14. Alpha1

    Alpha1 Regular Member

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    Curse zardari government!
     
  15. sob

    sob Moderator Moderator

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    As @sayareakd pointed out that on paper when 50% of the budget goes for Military and loan repayment then you are in deep shit.

    Also if we add the hidden money transfers for ISI funding and other military acquisitions then the figure could be touching 60% or even 70%. Imagine 3/4th of your budget for non growth areas.
     
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  16. AVERAGE INDIAN

    AVERAGE INDIAN EXORCIST Senior Member

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  17. sayareakd

    sayareakd Moderator Moderator

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    Sob, true, soon they are going to be in very deep trouble, our ATV production line has started, second sub will be delivered and third one will be out of hull factory. Suddenly they will find that we have 3-4 nuke subs in water, with live hair trigger nukes.
    MRCA will start its delivery in few years, mountain division shall be created to take on China, that can be easily send to J&K, more artillery guns, attack helicopters, BMD and future BMD test for 2000-5000 class of missiles, list is endless, we can afford all these things because of very strong economy and very strong fundamentals of economy, second one is more important in long run, rather than first one.
    All this will give sleepless nights to Pakistani military; their budget is bound to jump more in military expenditure, that will put more pressure of borrowing, more debt service and repayment. They are in vicious circle of our spending on uneconomic and non development activity that is bound to have impact on their economic development.

    We too had experience this in past, famous quote, "We are poor because we are poor" that is vicious cycle, now Pakistan is in the middle of that. Sooner or later they are going to default on their debt payment that will lower their sovereign rating further, which will make it more difficult for them to raise finance, finally they have to sell of their nukes in open market. BTW Afghanistan and daily bomb blasts will keep them busy. They have more blast and violence then in J&K.
     
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  18. sayareakd

    sayareakd Moderator Moderator

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  19. Blackwater

    Blackwater Veteran Member Veteran Member

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    my dears,

    Pakistan since inception living on AID. Pak is dependent heavily on IMF since 1980ties


    we all know how your infrastructure was build with saudi money.

    how your army was built with american $$

    we all know how ur ISI milked america with $$$ during afghan war

    We all know how muusshy milked Amerika with $$$ in the name of WOT after 2001 and kept osama as blank cheque

    why blame zardari and PPP??? blame ur ISI,gernail,kernail who made policies for the last 65 yrs and continue to do so
     
    Last edited: Jun 20, 2013
  20. Yusuf

    Yusuf GUARDIAN Administrator

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  21. Yusuf

    Yusuf GUARDIAN Administrator

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    India has its share of voting in IMF. Last time we voted in favor of Pak for loan. We should oppose this time
     

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