Crafting their next move: Officials at odds over what numbers to present IMF

[AsifAmeer]

By Shahbaz Rana
Published: September 7, 2012
http://tribune.com.pk/story/432628/...als-at-odds-over-what-numbers-to-present-imf/

---

As Pakistan prepares for the first round of post-programme monitoring talks with the International Monetary Fund (IMF), key state institutions are at odds over whether to present a rosy picture of the economy, or table realistic assumptions.



The State Bank of Pakistan (SBP) and the Ministry of Finance are at odds over the expected extent of the budget deficit in the current financial year: sources in the finance ministry say the central bank is insisting on presenting a more realistic, albeit bitter to swallow, scenario to the IMF in upcoming talks.
In a recent preparatory meeting for the post-programme monitoring dialogue, SBP officials asked the finance ministry to shun its policy of misleading the populace and adjust its macroeconomic framework according to ground realities, said the sources.

The SBP has taken the stance at a time when the finance ministry has come under a barrage of criticism for presenting unrealistic economic indicators. Critics say repeated misrepresentation also led to the government missing all macroeconomic targets set for the last fiscal year. Against projections of a 4% budget deficit, the government closed its books for fiscal 2011-12 with a highest-ever deficit of 8.53%.

The SBP has recommended revising the projected budget deficit upwards by 0.3%, and to set it at 5% for fiscal 2013, in line with ground realities. However, despite the prospect of public embarrassment due to misleading projections of nearly all key indicators, the finance ministry does not seem very bothered. The finance ministry is adamant on presenting the overall budget deficit projection unchanged at 4.7% to the IMF.

The SBP has also suggested the finance ministry revise this years Rs2.381 trillion tax target downward by the extent of the shortfall in collection during the last fiscal year. The Rs71 billion shortfall in revenue collection in fiscal 2012 dented the base used for setting the tax target for the current fiscal year, the central bank maintains.

The Federal Board of Revenue already faces massive revenue shortfall during the first two months (July-August) of the new fiscal year. The authoritys poor performance was a major point of contention in a recent meeting of the Economic Coordination Committee of the Cabinet.

Sources say that according to various estimates, the FBR cannot collect more than Rs2.2 trillion, even if it includes new tax measures. The authority has also reportedly started compromising on key tax policy measures, in a bid to appease vested interests ahead of general elections.

When contacted, Rana Assad Amin, spokesperson for the finance ministry, ruled out any revision in the budget deficit target. We are not ready for any revision at this point in time, said Amin, in a terse response.

Pakistans exposure to a $11.3 billion IMF loan has obligated the country to hold post-programme monitoring exercises, aimed to keep a close watch on the economy. The dates for the talks are being worked out, and it is expected that an IMF team will visit Islamabad for the upcoming round. Authorities are already planning meetings of the team with President Asif Ali Zardari and Prime Minister Raja Pervez Ashraf.

In its post-evaluation report on the programme, the IMF has suggested that any new programme be signed by the President, in order to obtain political assurances at the highest level. However, Pakistan has differed with this condition.

SBP authorities are expecting a tough round of negotiations, as the chief of IMFs Pakistan Desk has been replaced: Frank Jeffery, an American, has taken over as the post, replacing the soft-spoken Adnan Mazarei.

Published in The Express Tribune, September 7[SUP]th[/SUP], 2012.

 

[UKPakistani]

What is going to follow is going to be very very painful,

for who ever gets into office,

because it appears they(IMF) are ready to turn the screw.

Either default or get crushed with repayments beyond your means

OR

look elsewhere !

 

[gazoomartian]

SBP statement: SBP officials asked the finance ministry to shun its policy of misleading the populace


Look who is talking. they are the most prominent in destroying Pakistan by printing money and distributing it in market to create inflation and destabilize the economy. One thing good though, they have sugar coated it and call it 'We have injected Rs.....into the economy' giving the impression that they are really helping the economy.

Free Mason f****ers. Look at the three crowns on top of the State bank Building. Do you see a Free Mason crown, with someone sitting in a throne?


News item Sep. 1, 2012
[h=2]Rs379.850 billion injected by State bank of Pakistan[/h]

banking systempakistan investment bondsreverse repo open market oprationstate bank of Pakistantreasury bills​

Rs. 379.850 billion has been injected in banking system by State Bank of Pakistan in its reverse repo open market operation in treasury bills and Pakistan Investment Bonds.

According to SBP, the offered amount was Rs. 411.850 billion while the rate of return for 7 day declidned to 9.89 percent per annum.

 

[gazoomartian]

What is going to follow is going to be very very painful,

for who ever gets into office,

because it appears they(IMF) are ready to turn the screw.

Either default or get crushed with repayments beyond your means

OR

look elsewhere !

OR

Simply refuse to pay because money given to the PPP was for bribes and fake loans. The money was all printed in the printing house of the Free Masons.

If the new PM has guts, he would just stand up ONCE to the IMF and refuse to pay. he will see the benefit of doing that. They will never let go any country that owes them money. They will come crawling on their knees begging and offering extension, easy payment, moratorium etc.

Just stand up ONCE and reap the benefit. They wouldn't mess around with a nuclear Muslim country.

 

[AsifAmeer]

IMF would NEVER let a default happen. A default is in Pakistan's interest.

A new loan will ABSOLUTELY be issued but the strings attached with those loans and the repayment schedule will make Pakistan lag behind afghanistan.

Funny thing is, this whole Electricity shortages, the inflation, corruption, are all a byproduct of the repayment schedule by the IMF. Not saying IMF is evil. But its the nature of debt repayment. It just cant happen at a sovereign level.

Notice the amount of public interest in this issue. Compare this to the other thread where i called IK a liar. Shows priorities and shallow mindset.

What is going to follow is going to be very very painful,

for who ever gets into office,

because it appears they(IMF) are ready to turn the screw.

Either default or get crushed with repayments beyond your means

OR

look elsewhere !

 

[UKPakistani]

Notice the amount of public interest in this issue. Compare this to the other thread where i called IK a liar. Shows priorities and shallow mindset.

Sadly, it does not have enough spice

try mentioning nudity in the title next time (somehow) :):)

 

[gazoomartian]

IMF would NEVER let a default happen. A default is in Pakistan's interest.

A new loan will ABSOLUTELY be issued but the strings attached with those loans and the repayment schedule will make Pakistan lag behind afghanistan.

Funny thing is, this whole Electricity shortages, the inflation, corruption, are all a byproduct of the repayment schedule by the IMF. Not saying IMF is evil. But its the nature of debt repayment. It just cant happen at a sovereign level.

Notice the amount of public interest in this issue. Compare this to the other thread where i called IK a liar. Shows priorities and shallow mindset.

You should have said, IMF IS evil. I call it International Mother F****

When a country is debt free, IMF and similar (world bank etc), create political unrest in the country, war with neighbors, then they come as a messiah with briefcase full of money to help the govt finance the war.

 

[only_truths]

OR

look elsewhere !

1.China will not support, because China will see its utility and Pakistan's utility is becoming less as years pass by and the trade between India and China is growing.

2. As the time for Afghan pull out is nearing, all western NATO countries will not be interested in any bail out.

3. At least in Greece case, the Euro zone came to the rescue due to common currency where Germany would have never let Euro to go down. This scenario does not apply to Pakistan as none of the South Asian countries have common currency even though every one boast of their own rupee. Bangladesh moved away from the name rupee to Taka (meaning rupee in Bengali) due to Pakistan meddling.

4. @gazoomartian @AsifAmeer - How easy it will be to show the middle finger to IMF? Even if an honest Govt . takes over, the aftermath such default (tenga to IMF) would be much worse than the status quo. What you would be doing on the taxation front would be similar to IMF conditions but without their support funding. Given the political scenarios in point 1 and 2, to save Pakistan , it would be left to individuals like you to pitch in. How many of you would pour in your dollars in lieu of FDI?

quote: "And there will always be a need for the IMF as a scapegoat of first resort!" (Read here: the last paragraph is the essence of the article: http://www.imf.org/external/np/speeches/2003/111803.htm)

 

[UKPakistani]

If enough countries told the IMF where to go and what to do there, what could they do.

Loan more,restructure, and ask for bigger repayments over longer ?

Someone has to say enough of this bullshit

We never borrowed it, we aint paying.

I read they want to get Zardari's signature as PoP before he goes, binding the Pak Gov and people to the IMF for more money and more higher interest rates. As long as he gets his cut that SoB will sign anything

 

[gazoomartian]

If enough countries told the IMF where to go and what to do there, what could they do.

Loan more,restructure, and ask for bigger repayments over longer ?

Someone has to say enough of this bullshit

We never borrowed it, we aint paying.

I read they want to get Zardari's signature as PoP before he goes, binding the Pak Gov and people to the IMF for more money and more higher interest rates. As long as he gets his cut that SoB will sign anything

if I were the PM, I would call an APC, present the case to all parties asking them to back me up on reneging on the repayment as the need for loan was artificially created to trap Pakistan into unstable.
I would simply tell IMF to f*** off, do what they want to do. I would also order the command n control to put their fingers on the nuke gun cock.

You will see how IMF/World Bank, kneel down and hold emergency meetings and come begging with offers of reconciliation of loans etc.

But the basic requirement is STAND UP ONCE and show guts that you mean business. Brazil back out and the IMF couldnt do anything (or was it Argentina?)

 

[UKPakistani]

if I were the PM, I would call an APC, present the case to all parties asking them to back me up on reneging on the repayment as the need for loan was artificially created to trap Pakistan into unstable.
I would simply tell IMF to f*** off, do what they want to do. I would also order the command n control to put their fingers on the nuke gun cock.

You will see how IMF/World Bank, kneel down and hold emergency meetings and come begging with offers of reconciliation of loans etc.

But the basic requirement is STAND UP ONCE and show guts that you mean business. Brazil back out and the IMF couldnt do anything (or was it Argentina?)

How about something a little more "insane", You as PM should simply announce that we are quite happy to sell nuclear technology to anyone willing to pay the right price, provided they only wish to use it for peaceful purposes. We will ensure they do

how much money would they pay for that not to happen :)

 

[gazoomartian]

How about something a little more "insane", You as PM should simply announce that we are quite happy to sell nuclear technology to anyone willing to pay the right price, provided they only wish to use it for peaceful purposes. We will ensure they do

how much money would they pay for that not to happen :)

Thank you brother

You have merit in your idea. But we have to ensure that the buyer of the nukes does not boomerang the nuke towards ourselves. Our scientists have to vigilantly develop necessary safeguard in the weapon itself.

May be each weapon will have a built-in GPS with ability to fall in the sea if it were fired upon us. But leave it to our smart scientists.