World powers blackmailing Pakistan on IMF bailout

A-Thinker

Senator (1k+ posts)


ISLAMABAD: Foreign powers want Pakistan to either slow down work on the CPEC or come out of it, eminent economist and Dean of Special Sciences and Humanities in the NUST Dr Ashfaque Hasan Khan told The News.


Dr Ashfaque said Pakistan simply could not get out of this project of paramount importance, as it was good for its economy and people.

"From the very beginning, I have been suggesting the PTI government to avoid going to the IMF this time, as the geo-strategic environment has altogether changed. In the past, Pakistan always stood on the right side of these powers,” said Khan who is also the Economic Advisory Council member.

He argued that these powers had the clout of all major economies to dictate the IMF in Pakistan’s case.



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“Today Pakistan is standing on the ‘wrong side’ of these forces. The Indo-Pacific alliance also stands together to counter the growing influence of China in the world. Three US congressmen have recently requested that the IMF should not be allowed to lend money to Pakistan fearing that it will use this money to pay back the Chinese debt.

Dr Ashfaque said India also built up armed forces on its borders due to which Pakistan also took same measures.

He said the Indian economy allowed maintaining military build-up for a longer period, but Pakistan’s economy, which was in tatters, could not allow it.

Dr Ashfaque said the government will slice down the development budget and maintain or increase the defence budget, but political parties and the social media will begin criticising allocation of major chunk of budget for defence.

This, he said, will create a gulf between the masses and the armed forces and that’s what the IFIs (international financial institutions) under the influence of big economies this time want under a well-planned design.

Coming to Pakistan’s economy, Dr Khan said GDP growth numbers worked out by the IFIs such as 3.9 percent by the ADB, 3.4 percent by the World Bank and 2.7 percent by the IMF served nothing but to push Pakistan to the Fund on strict terms.

The well-coordinated growth numbers of our economy seem a planned design to create unrest among the business community across the country.

He said the IMF worked out 2.7 percent GDP growth for the current fiscal and 2.5 percent for the next. Dr Khan said Pakistan was most likely to come up with close to 4 percent. ’However, the Fund is also stressing the government to make the revenue target of Rs5400 billion for the next budgetary year.

He argued that the IMF had factually made fun of it. On the one side, the Fund is predicting the lowest GDP growth, on the other side it is asking for 40 percent growth in revenue.

“When there is growth of 2.5 percent then pressurising to make revenue target on the highest sides is beyond wisdom of all economists,” he said.

Dr Khan said if Pakistan succumbed to the IMF pressure on the revenue target of Rs5400 billion, then the PTI government will be left with no option but to announce a mini-budget every quarter for more taxation to achieve the revenue target making Pakistanis’ lives more miserable.

Dr Khan feared that after the IFIs projected growth figures, rating agencies such as Standards & Poors and Moody’s will downgrade Pakistan’s ratings, making it unable to generate financings from the international market.

He claimed that the IMF had no capacity to even work out the growth of economy for next two months.

Mr Khan said the IMF will make Pakistan’s budget with growth in revenue target of Rs5400, cut on development budget and massive surge on taxation and more appreciation of dollar.

He said discount rate will also be increased which will increase the borrowing cost for the private sector. Since the private sector will not borrow loans, Pakistan’s economic activity will come to a standstill.

With increase in dollar appreciation, the cost of Pakistan’s 60 percent raw material import which is used for industrial production has increased manifold.

He said the government had depreciated the Pak Rupee value by over 36 percent with an aim to increase exports but unfortunately these had decreased by 11 percent. This, he said, can happen in a country where the imported materials stand at 25 percent.

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shapik

MPA (400+ posts)
Muahida nakero tto bolte hain kiun nahi ker rahai...... muahidai ki batain kero tto kehtai hain pehle kiun nahi kya bohat late kerdya....ub jub hogaya hai tto kehtai hain bc kiun kya
 

Kamboz

Senator (1k+ posts)
Ho gaya hai muaheda ab ye randi k bache apna chakla band karden ye dale economic terrorists hain dale in jese rumors phelane walo ko phansi dene chahye
This is learned scholar who know what he is talking about..unlike you morons who have no clue.... He has been saying even before this Govt took office that do not go to IMF. There are ways to survive without IMF ... but our advisors are very much influenced.
 

disgusted

Minister (2k+ posts)
Dr sahib every knows the disease but none including your honour can come up with the treatment. Even the village idiot knows that when you take excessive loans you land in a shit-tank. We are waiting in vain for the corrective measures from the most eminent economists especially those who served in the World Bank.
 

Mojo-jojo

Minister (2k+ posts)
This is learned scholar who know what he is talking about..unlike you morons who have no clue.... He has been saying even before this Govt took office that do not go to IMF. There are ways to survive without IMF ... but our advisors are very much influenced.
I hope IMF conditionalities are not as bad as Dr Ashfaq is saying. Asad Umar was delaying the deal with IMF simply to avoid the harsh terms and conditions . We will find out the reality soon.
 

Jack Squire

Voter (50+ posts)
I hope IMF conditionalities are not as bad as Dr Ashfaq is saying. Asad Umar was delaying the deal with IMF simply to avoid the harsh terms and conditions . We will find out the reality soon.
That was a good try at Asad Umar's part, however the IMF is hell bent to make IK's govt increase taxes on people while on the other hand India is exerting pressure on the border which requires Pak to spend big on defence budget --- this in turn can lead to misunderstandings within the general public who unable to see the bigger picture might start maligning the Pak Forces AND THIS is the agenda of the forces out there..... Either keep corrupt puppets like Nawaz Sharif/Zardari in power who are easier to control OR if a good ruler is somehow elected, then make it extremely hard for him to rule through such coercive measures.... If the people of Pak don't realize this, we will fail miserably as a Nation... May Allah SWT help remove the veil of ignorance from our eyes and give us patience, courage when faced with such adversity! Amen!
 

kakamuna420

Chief Minister (5k+ posts)
for 6 billion, it was better to get them from Russian. IMF and Worldbank are plagued by one one sect and qadianis. They will both try to destroy this country
 

Sohail Shuja

Minister (2k+ posts)
Does dr ashfaq hassan sb have a plan B?
No they don't so let others do the thing they are doing
In fact he does, but only if one is able to listen to it and leave dancing to the tunes of their masters. Dr Sb, at the very start of this crisis suggested to reduce imports by 2 Bn USD a year. If you do not import luxury vehicles, cosmetics and other such commodities, this target can be achieved easily, without taxing the poor and make them suffer from the lavish of the bourgeoisie.

Decreasing imports may also mean hunting for alternative energy resources, like India did in the past two decades by investing in Bio-gas technology.

Reduce subsidy on politically motivated operations like metro and subsidy given to Sugar mills to on export of sugar. Everyone knows who in PTI wants a subsidy on export of sugar. Rather, Govt should have been more considerate to uphold the export in textile sector as it makes up the biggest capital investment and biggest chunk of our export revenues.

All of this is possible if one uses his own head, rather than blindly following people.
 

Sohail Shuja

Minister (2k+ posts)
I guess this person's days are numbered in PTI Govt and he may end up like Justice Wajihuddin, for being upright and outspoken, not giving in to any personality worship.
 

Jack Squire

Voter (50+ posts)
In fact he does, but only if one is able to listen to it and leave dancing to the tunes of their masters. Dr Sb, at the very start of this crisis suggested to reduce imports by 2 Bn USD a year. If you do not import luxury vehicles, cosmetics and other such commodities, this target can be achieved easily, without taxing the poor and make them suffer from the lavish of the bourgeoisie.

Decreasing imports may also mean hunting for alternative energy resources, like India did in the past two decades by investing in Bio-gas technology.

Reduce subsidy on politically motivated operations like metro and subsidy given to Sugar mills to on export of sugar. Everyone knows who in PTI wants a subsidy on export of sugar. Rather, Govt should have been more considerate to uphold the export in textile sector as it makes up the biggest capital investment and biggest chunk of our export revenues.

All of this is possible if one uses his own head, rather than blindly following people.
True to an extent. Do you know that Pak generates most (80%+) revenue from imported items in the form of duties/taxes/customs and such, totally cutting down imports will result in a massive reduction in FBR's revenues (which we can already see). What we need is to aggressively explore oil sites in Pak (near the Iran border) in order to produce oil locally which at the moment costs Pak $9.6Billion/year (Figure reported last month)....
 

loser24x7

Chief Minister (5k+ posts)
I guess this person's days are numbered in PTI Govt and he may end up like Justice Wajihuddin, for being upright and outspoken, not giving in to any personality worship.
He is not holding any office in PTI government (being a memeber of econmic advisory council is just an honorary BS). He an academician at the moment so no chance of being thrown out I guess.
 

Sohail Shuja

Minister (2k+ posts)
True to an extent. Do you know that Pak generates most (80%+) revenue from imported items in the form of duties/taxes/customs and such, totally cutting down imports will result in a massive reduction in FBR's revenues (which we can already see). What we need is to aggressively explore oil sites in Pak (near the Iran border) in order to produce oil locally which at the moment costs Pak $9.6Billion/year (Figure reported last month)....
Conversely speaking, by reducing import of the luxury items, there will be an increased opportunity for the local manufacturers to increase their sales inland. Therefore, the cut on the inland revenues will not be significant as the local industry will fill in the gap, so more GDP coming. Moreover, reducing imports will decrease the trade deficit, therefore no need for begging dollars to clear out the payments.

Exploring oil is not a bad idea, but are we all out at it? Kekra field has its history of dryness since 1970s and personally I do not like Exxon Mobil and Halliburton for their role in Iraq war.
 

Jack Squire

Voter (50+ posts)
Conversely speaking, by reducing import of the luxury items, there will be an increased opportunity for the local manufacturers to increase their sales inland. Therefore, the cut on the inland revenues will not be significant as the local industry will fill in the gap, so more GDP coming. Moreover, reducing imports will decrease the trade deficit, therefore no need for begging dollars to clear out the payments.

Exploring oil is not a bad idea, but are we all out at it? Kekra field has its history of dryness since 1970s and personally I do not like Exxon Mobil and Halliburton for their role in Iraq war.
Fair point, especially the last bit, however we don't have the tech to extract the much required resources.... check out this video..
 
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