The unbreakable beggar's bowl
The unbreakable beggar's bowl:Pakistan drowned in debt up to its neck.
DUNYA NEWS REPORT (HUMAIRA SAJID)
ISLAMABAD – The elected government of the Pakistan Muslim League-N is unable to break the beggar’s bowl and has set the groundwork for taking another loan from the International Monetary Fund (IMF) to return the preceding loans.
Like its predecessor, the PML-N government has failed to bring down the debt-to-Gross Domestic Product ratio to within statutory limits of 60%. It has been borrowing in violation of Fiscal Responsibility and Debt Limitation Act that binds the sitting government to keep the total public debt below 60% of GDP.
Pakistan has obtained foreign loans worth $49 billion during the last 10 years and over one-third were utilized for budgetary support instead of creating physical assets, hence raising questions of debt sustainability. An installment of worth $502m was also given in December last year on the conditions of carrying out extensive economic reforms, particularly in the energy and taxation sectors.
Speaking to a media conference, Pakistan Tehreek e Insaf Chairman Imran Khan threw a volley of questions at the PML-N leadership and expressed serious reservations over the spending of billions on the metro bus and orange train projects while 25 million kids were out of school, there were no medicines at government hospitals and no project for the provision of clean drinking water to the masses. He claimed that in two and a half years, the PML-N government had taken Rs 47, 000 billion loans and asked where this money was going.
An influential think tank on Friday criticized the International Monetary Fund (IMF) for applauding inaccurate economic indicators just to demonstrate that its program is performing well in Pakistan. Institute for Policy Reforms (IPR), in its fact sheet on the “false statements made by the IMF”, said the mission chief Herald Finger recently made “a number of factual errors” in the ninth review of the Extended Fund Facility to the country.
“This may be due either to wrong information being provided by the (Pakistani) authorities or a lack of awareness of latest trends or due to pressure to demonstrate that the program is performing well and that the staff mission has been successful in inducing improvement in the economic indicators through promotion of appropriate actions,” an IPR statement said. It said there have been a number of developments, which could impact negatively on the growth rate in 2015-16.
It said, according to the Social Policy and Development Centre’s estimates, the number of poor is annually increasing by more than three million. “The pressure for fiscal contraction under the IMF program has probably been one factor contributing to the recent increase in poverty,” the statement said.
The think tank said the largest industrial plant of the country, the Pakistan Steel Mills, is shutdown. Therefore, it is unlikely that the GDP growth rate will substantially exceed three percent in 2015-16. IPR criticized IMF on its assessment on the country’s poverty reduction. The mission said, “Over the last decade or so poverty has come down in Pakistan.”
Minister for Finance, Senator Muhammad Ishaq Dar on Monday reached Dubai to participate in 10th review talks between Pakistan and International Monetary Fund (IMF). In these policy-level talks Dar lead Pakistani delegation and Herald Finger is heading the IMF team, officials in the Ministry of Finance told. Ishaq Dar said while talking to the media that PML-N government inherited 8.8 percent fiscal deficit when it came into power in 2013 which has now brought down to 5.3 percent and would further be sliced to 4.3 percent during the current fiscal year 2015-16.
Ishaq Dar said the present government has adopted fiscal discipline in all financial sectors and the public development expenditure which were only Rs.400 billion have been increased to Rs.700 billion. Highlighting the China-Pakistan Economic Corridor (CPEC), he hoped that it would contribute a lot in furthering economic development. In financial sector, he said the government has initiated reforms which has further strengthened the financial sectors especially the banking sector in the country.
