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SoS call to IMF inevitable: IWCCI

Islamabad: The Islamabad Women’s Chamber of Commerce and Industry (IWCCI) on Monday said Pakistan will have to go to International Monetary Fund (IMF) for another unpopular agreement to avert an economic meltdown.

A trust deficit will not allow government to use other options successfully as many friendly countries doubt our ability to improve economy without supervision of the international lender, it said.

Country has not performed well on economic front and it will soon run out of all options but to seek another loan on harsh conditions, said Farida Rashid, President IWCCI.

Talking to women entrepreneurs, she said that despite warnings, the Government’s total expenditures has exceeded by 8 per cent than income which is almost double than what is acceptable to IMF.

A loan without hurting poor and having enough safety nets will be a challenge for economic managers who remained unsuccessful to introduce reforms including agriculture tax, plugging taxation system loopholes, bringing expenditures and deficits down, improving tax-to-GDP ratio, and ensuring zero borrowing from the SBP, she said.

Farida Rashid said that most of the economic and social indicators are depressing and there is no indication that government will take serious steps to revive economy due to its preoccupation with the upcoming elections, she noted.

She said that recent reception of $688 million in the shape of Coalition Support Fund will be of little help as government has yet to manage fiscal affairs properly.

Pakistan’s government debt commonly called as public debt more than doubled in last four years to 13 trillion which raises many questions, she said.

Farida Rashid said that rupee lost 7.6 per cent against the US dollar in 2012, it depreciated by 8.8 per cent during 2011; while the energy crisis and problems faced by textile sector will invite more problems including wide current account deficit.

Another payment of $545.62 million to IMF due in February 2013 will put additional strain on reserves sliding for last 17 months while Etisalat is in no mood to pay $800 million it owes while tax collections remain dismal, she said.

Serious effort should be initiated to convince the lender to reschedule loan as delay will hurt Pakistan more, she observed.

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