IMF doubts Pakistan’s capacity to repay loans, introduce reforms

May 20, 2012 in Business, Pakistan Leave a comment

Lahore:The Pakistan Economy Watch (PEW) on Sunday said it would be difficult for Pakistan to secure another bailout package from the IMF to avoid looming crisis of external payments.
Pakistan has good relations with the US in 2008 when it got 7.6 billion dollar loan after two weeks of negotiations but now the situation is different, it said.
At present, our relations with the US are tense, IMF is focused on European crisis and unhappy over our failure to introduce reforms, said Dr. Murtaza Mughal, President PEW.
IMF doubts Pakistan’s repayment capacity; it is in no hurry to lend more to enable Pakistan to return 4.3 billion dollars in the next fiscal, he said.
He said that Pakistan has already taken IMF loans exceeding quota by 200 per cent while there are no plans to introduce any reforms which has frustrated IMF to a point that it has delayed visit of the mission.
Dr. Murtaza Mughal said that our economic managers can paint a rosy picture of economic miracles to please masses but cannot lure IMF officials who are well aware of the situation, he added.
Finance ministry claim that 21 per cent hike in remittances to $13.5 billion reflects trust of expats in policies of the government which is not reality, in fact, they are sending more money due to rising poverty, he noted.
They know that Pakistan’s current account as gap has increased to $ 12.6 billion compared to last year’s $ 8.4 billion, foreign investment has nosedived by 65 per cent and short-term receipts remained zero.

Similarly, he said, expressing pleasure over loans of World Bank can help satisfy electorate but it has nothing to do with enabling government to cope with balancing the payments.
Government may not get $ 80 billion any time soon that it claims NATO forces owe for its contribution to the international war on terror.
Similarly, there are no chances that other donors would help country to cope with the crisis in the making therefore government should think seriously about alternatives, said Dr. Mughal.