Pakistan and International Monetary Fund (IMF) on Thursday reached an agreement for a 3-year loan programme of at least $5.3 billion under an Extended Fund Facility (EFF) and the programme is said to be based on Islamabad’s “home grown agenda”.
Is this a right step for a country like Pakistan who is already in debt of billions which are still to be paid back to IMF?
Pakistan has been a regular client of the IMF for more than two decades. It has entered nearly a dozen loan programs since 1988, but only successfully completed a handful. The country currently owes the IMF just over $6.2 billion.
The country has already once averted a balance of payments crisis in 2008 after securing the $11 billion IMF loan package, which was suspended two years ago after economic and reform targets were missed.
Again, chronic gas and electricity shortages, violent crime and a Taliban insurgency have all hampered growth and contributed to falling foreign investment. The $230 billion economy grew 3.6 percent in the last fiscal year, below a target of 4.3 percent and well below growth rates of around 9 percent seen 10 years ago. …
With reserves shrinking by around $500 million a month and many Pakistanis are angry over unemployment as well as high food prices and crippling power cuts. Unemployment is officially at 6.3 percent but is probably much higher.
The major problem faced by Pakistan now days is of electricity shortage and terrorism.
According to IPP (Independent power producer) following statistics are being provided:
Product Megawatt Price per unit
1- Furnace oil 4000 megawatt 20 rupees per unit.
2- Gas 4000 megawatt 5 rupees 50 paisa per unit.
3- Water 3000 megawatt 25 paisa per unit.
4- Captive power 1500 megawatt 7 rupees 50 paisa
5- Diesel 500 megawatt 25 rupees per unit
6- Nuclear power 500 megawatt 25 paisa per unit ( approx)
In all thirteen thousand five hundred megawatt electricity production takes place in Pakistan and its average cost is 9 rupees per unit. If we include 30 percent illegal electricity consumption charges or line losses in it, then this electricity will cost us 11 rupees 50 paisa. A common man now pays approximately 24 rupees or more on per unit electricity consumption.
After going through all these statistics; it accounts that the electricity which we are getting at an industrial price in our homes, factories, shops, offices and schools is way too high than the above mentioned prices.
Now a question strikes through that was this loan an easy way out than generating the same amount by them. Another factor, which strikes through, is that while approving this loan the government officials stated that, we accepted this loan sanction under our own terms and condition, not the one’s which IMF stated.
How can this be practical? Is the government trying to hide something from the public? How can this be possible for the one who is borrowing something on his own terms and condition and the one’s who are lending it are absolutely satisfied with it.
Nawaz Sharif in his address said that we will sell the national assets of the country too when necessary. Is it important to sell these national assets? Is there no other way?
When the budget policies for this year were announced, a havoc was created, many voices raised up and stated that if we adjust our tax system we can generate this much amount of money on our own. There will be no need of borrowing the money from another country.
Dr Shaihd Masood an economist says that, the government has not taken this loan for the betterment of the society or public but they have approved this loan to payback IMF’s previous loan which was taken in 2008 on an agreement that it has to be returned in a fixed amount in the next coming years.
It was clear that our previous government failed to return that money and its interest on time, so the new government is again taking loan to payback that money. Now who has to pay it back? Every time the government signs a loan, the burden of tax imposed on public rises with it.
The loan taken by IMF in 2008 was mismanaged on a high level, it was a p
Is this a right step for a country like Pakistan who is already in debt of billions which are still to be paid back to IMF?
Pakistan has been a regular client of the IMF for more than two decades. It has entered nearly a dozen loan programs since 1988, but only successfully completed a handful. The country currently owes the IMF just over $6.2 billion.
The country has already once averted a balance of payments crisis in 2008 after securing the $11 billion IMF loan package, which was suspended two years ago after economic and reform targets were missed.
Again, chronic gas and electricity shortages, violent crime and a Taliban insurgency have all hampered growth and contributed to falling foreign investment. The $230 billion economy grew 3.6 percent in the last fiscal year, below a target of 4.3 percent and well below growth rates of around 9 percent seen 10 years ago. …
With reserves shrinking by around $500 million a month and many Pakistanis are angry over unemployment as well as high food prices and crippling power cuts. Unemployment is officially at 6.3 percent but is probably much higher.
The major problem faced by Pakistan now days is of electricity shortage and terrorism.
According to IPP (Independent power producer) following statistics are being provided:
Product Megawatt Price per unit
1- Furnace oil 4000 megawatt 20 rupees per unit.
2- Gas 4000 megawatt 5 rupees 50 paisa per unit.
3- Water 3000 megawatt 25 paisa per unit.
4- Captive power 1500 megawatt 7 rupees 50 paisa
5- Diesel 500 megawatt 25 rupees per unit
6- Nuclear power 500 megawatt 25 paisa per unit ( approx)
In all thirteen thousand five hundred megawatt electricity production takes place in Pakistan and its average cost is 9 rupees per unit. If we include 30 percent illegal electricity consumption charges or line losses in it, then this electricity will cost us 11 rupees 50 paisa. A common man now pays approximately 24 rupees or more on per unit electricity consumption.
After going through all these statistics; it accounts that the electricity which we are getting at an industrial price in our homes, factories, shops, offices and schools is way too high than the above mentioned prices.
Now a question strikes through that was this loan an easy way out than generating the same amount by them. Another factor, which strikes through, is that while approving this loan the government officials stated that, we accepted this loan sanction under our own terms and condition, not the one’s which IMF stated.
How can this be practical? Is the government trying to hide something from the public? How can this be possible for the one who is borrowing something on his own terms and condition and the one’s who are lending it are absolutely satisfied with it.
Nawaz Sharif in his address said that we will sell the national assets of the country too when necessary. Is it important to sell these national assets? Is there no other way?
When the budget policies for this year were announced, a havoc was created, many voices raised up and stated that if we adjust our tax system we can generate this much amount of money on our own. There will be no need of borrowing the money from another country.
Dr Shaihd Masood an economist says that, the government has not taken this loan for the betterment of the society or public but they have approved this loan to payback IMF’s previous loan which was taken in 2008 on an agreement that it has to be returned in a fixed amount in the next coming years.
It was clear that our previous government failed to return that money and its interest on time, so the new government is again taking loan to payback that money. Now who has to pay it back? Every time the government signs a loan, the burden of tax imposed on public rises with it.
The loan taken by IMF in 2008 was mismanaged on a high level, it was a p
