The IMF disease eating away our daily bread
Pakistan’s economy has paid a huge price in partnering the war on terror with the USA. According to a recently released IMF report called “Pakistan Poverty Reduction Strategy Paper”, total losses, measured in terms of exports, foreign investment, industrial output and tax collection, are estimated to be around RS 2.08 trillion during the last five years period.
The war on terror has outbalanced already stretched financial resources of the government as a consequence the development projects have been cut resulting in increase in poverty and unemployment. The nation incurred a loss of RS 259 billion in FY 2005 and in FY 2009 it reached over RS 650 billion-indicating more than 100% increase in losses. The report indicates that FY 2007/08 has been a bad year for the economy when several unexpected political and economic events occurred.
The period of economic boom started in 2001/02 and it busted in 2006/07. During the boom period, the economy recorded several macroeconomic achievements. It doubled in size with annual GDP growth rate peaked at 7%, incredibly inflation was well under control during the boom period, the debt burden reduced to one-half, foreign exchange reserves were sufficient to cover up 6 months import, Pakistani stock market ranked among the top performers in the emerging markets, and the FDI was 6% of GDP. Given the brighter outlook of the economy, Pakistan successfully launched sovereign bonds of maturity ranging from 5-30 years and these were oversubscribed in the international capital market which reflected strong confidence of foreign investors.
The above achievements were recorded when the IMF was staying from Pakistan and the country was free t...
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...addressed immediately are; improvement in security situation and the economic governance.
The government is running out of choices as on the one hand it has to meet the harsh conditionalities of the IMF and on the other has to save the economy from total collapse-balancing the two wheels is rather a difficult job for the economic managers of the country. The harsh IMF conditions at the moment are doing no good to the economy, instead, have added to the frustration of common men. What Pakistan needs right now is a growth which is not only demand driven but job oriented which will help increase consumers’ income and standards of living of average Pakistanis. But with high prevailing interest rates, poor security situation coupled with carrot and stick game of the IMF, the task is unlikely to be achieved. Hence the growth will remain subdued in the near future.
The global economy has been recovering from the financial crisis which occurs in 2008, then has a weak growth for most developed countries over 2012 and 2013. But economic activity in Canada has expanded at a faster pace than most other major advanced countries in 2012; however, economic performance in Canada has been unsteady throughout 2013 (The Economic review, 2013). After the last quarter in 2010 GDP growth rate grows rapidly, the GDP grows slowly but steadily in 2012 which remains at around 3 percent. Real GDP growth rate in Canada grows slowly in the first quarter of 2013, but increased by 5 percent in the second quarter ,then remains the same level until the first quarter of 2014 (Statistics Canada, 2014). In 2014, the Canadian government take a series economic action plan as a guide for the economy development such as improving investment conditions, ...
In 2006 and 2007 the growth rate recovered to 3.9% and 3.4% but then dr...
The standard crisis developing countries face is, a high demand for goods and services, with high money growth, high government spending, high wages, and high inflation. All while exports are low and imports are high. The standard solution is slow money growth and low government spending. Unfortunately these cures take time and during the transition the country may borrow from the IMF to finance the trade imbalance.
The International Monetary Fund (IMF) is an international organization was set up in 1945 after World War II. The whole world had experienced severely destruction during the period World War One and World War Two, each state need the restorative processes and a good platform to recover its inherent ability and make their citizens get rid of poverty, hence economy problem it was the first problem that states should be concerned.
The energy shortages in the country are also causing much of the economic activity to erode. The economic and political structure of the country is not only root cause of these shortages but also is pushing the situation to the worst side. The circular debt in the country is causing many multinational companies, and also local companies to consider a potential disinvestment from the country. The flight of foreign direct investment from the country is castigating the economy as well (Saeed 2013).
Of late, with the growth in private sector, inflow of FDI, tourism industry, manufacturing company, more diplomatic relation with other countries etc has further helped in increasing the Gross Domestic Product (GDP) of the country. With higher GDP, more budgets will be there to improve the quality of life of the citizens but on contrary, with increasing population and more infrastructure development, the economy state of t...
“We are here in this country to bring peace and harmony through financial stability of people across Pakistan. We are here to promote individual and corporate growth nationwide and we are best at it and yes, we can…..”
Velde,D.K (2008). The global financial crisis and developing countries. Available at: http://www.odi.org.uk/resources/download/2462.pdf (Accessed: 5th August 2010).
inception is that of fear of India. The problem of Pakistan’s foreign and defence policy revolved around this central theme of Indian domination and safeguards that were to be instituted to counter this
In the end I can suggest that Fiscal and monetary policy of Pakistan has great effect on the economy of the country the coefficient of monetary policy is higher than the fiscal policy which shows that the monetary policy of Pakistan has more concerned with the economic growth than the fiscal policy. In result of this the policy makers should much more focus on the monetary policy than the fiscal policy as compare to its importance to boost up the economic growth. And on the other hand if we talk about the fiscal policy it can also help to enhance the economic growth by eliminating corruption from the country, proper allocation of the resources and control over the wastage of resources. In the end we can suggest that a developing country like Pakistan cannot survive without the effective fiscal and monetary policy.
The topic of my research essay is “Pakistan took too many loans from IMF which actually was not needed”. Pakistan did not need any foreign financial assistance and was able to handle the setbacks. In my essay, first of all I will tell you that what IMF is and what is his role in the world. Secondly, I will tell you that how and when Pakistan took his loans from IMF and what were the conditions set by IMF authorities. And then I will tell you the condition of Pakistan at the time of its first structural adjustment program. Then I will give some examples like Bolivia and will compare Bolivia with Pakistan. At the end, I will tell you some other ways to the solutions to Pakistan problems.
GDP grew in the year 2001-02 at a rate of 4.5% and was projected to grow by 5.5% in the year 2002-03. In the year 2001-02 contribution of agriculture is 24.6%, industry 26.5% and the balance by services other sectors. It was noted that the share of industrial production in the GDP was growing indicating revival of the economy. Contribution of industrial sector increased from average 11.11% in the year 1999-2000 to 25% in 2001-02 and was poised to account for 30% in the year 2002-03. Conducive policies announced by the government for industrial development led to revival of the economy. Figure 1.1 shows the GDP growth from 1997-2003.
One of studies to explore the locational determinants with reference to Pakistan is done by Akthar (2000). He uses the technique of the multivariate regression to determine the determinants. He uses the market size (openness to trade), relative interest rate and exchange rate, political instabil...
Pakistan is facing energy crises due to increase in demand, a poor management and lack of investment in our energy resources. Our energy needs depends upon oil and gas. We have to import about 30% energy in the form of crude oil, coal, LPG etc. [5]
Pakistan is the basis in the international fight against terrorism to this day. Many Pakistani terrorist groups have made many terrorist attacks around the world. Pakistan faced the choice siding with or staying against the United States during the aftermath of 9/11. Violence in Pakistan has increased for many years as terrorist groups have targeted many political leaders, tribal leaders, the military, and also schools. Pakistan is divided into people who see the country as modern and/o...