Let's make things clear. Countries go to IMF when they're in short term liquidity crisis. What IMF does when it provides these loans is to make the government balance their finances. That means if I am earning 100 rupees then spend 100 rupees. If I want to spend more, earn more. IMF doesn't do reforms. Now, the problem with Pakistan is not just one. Huge capacity payments (high energy costs), pension payments, no fiscal discipline and incompetent bureaucracy. Contrary to what people think, what's hurting Pakistan Economy the most is its civil servants, not their politicians. They're very incompetent and often make bad deals/agreements. Pakistan has to reform and stabilise their macroeconomy otherwise every couple of years, they'd be running to IMF because of liquidity issues.
True, IMF provides money to solve liquidity crisis. If the liquidity crisis is due to market forces due to sudden drop in asset values vis a vis liabilities, then IMF help will work. If the problem is asset values are less vs liability it is a solvency crisis. IMF help cannot solve solvency crisis. Capacity payments is tiny compared to wages and pensions of govt staff (both centre and states). They are paid more than what they are serving the duty. So effective burden falls on productive sector in the form of higher taxes to pay for the inefficient govt staff. Pakistan problem are two fold. One is external deficit and second one is internal deficit. Internal deficit due to higher wages of govt staff and external deficit due to no productive capacity. Real problem is the first one. Higher govt wages means, less capital available for private capital, meaning less investment and leading to less production. This is a spiral. Also govt wages creates artificial demand for imports leading to excess trade deficit. Only way out is to cut the govt staff by half both centre and state. Problem with that is Pakistan will cease to exist because of social unrest. There is social angle to the crisis. Islamic states are ransom seeking attitude. Only reason gulf states survive is due to oil. only islamic states that have production capacity is indonesia and malaysia. thats because their values are more aligned towards east asia. Thats because Islamic people believe thay are superior over others. this leads to mentality of not working. they extract work from others. now they cannot get from anywhere. so they are squeezing their own people and thats where the suffering starts
Pathetic i have objections... Dr Naveed has discarded one young man's discussion and overall there they are calling the general public is Harami and Beghairat.
Daso jo eh saab bol rahe hain. Inno ne kvi herapheri kiyi nahi hogi. Sir blood vich chali gayi hai HERAPHERI. Pakistani herapheri KARTE Hain. Bangladeshi aehsaan farmos log hain
Pathetic i have objections... Dr Naveed has discarded one young man's discussion and overall there they are calling the general public is Harami and Beghairat. Why are you ppl asking questions when you fear other people's questions.
Let's make things clear. Countries go to IMF when they're in short term liquidity crisis. What IMF does when it provides these loans is to make the government balance their finances. That means if I am earning 100 rupees then spend 100 rupees. If I want to spend more, earn more. IMF doesn't do reforms. Now, the problem with Pakistan is not just one. Huge capacity payments (high energy costs), pension payments, no fiscal discipline and incompetent bureaucracy. Contrary to what people think, what's hurting Pakistan Economy the most is its civil servants, not their politicians. They're very incompetent and often make bad deals/agreements. Pakistan has to reform and stabilise their macroeconomy otherwise every couple of years, they'd be running to IMF because of liquidity issues.
True, IMF provides money to solve liquidity crisis. If the liquidity crisis is due to market forces due to sudden drop in asset values vis a vis liabilities, then IMF help will work. If the problem is asset values are less vs liability it is a solvency crisis. IMF help cannot solve solvency crisis. Capacity payments is tiny compared to wages and pensions of govt staff (both centre and states). They are paid more than what they are serving the duty. So effective burden falls on productive sector in the form of higher taxes to pay for the inefficient govt staff. Pakistan problem are two fold. One is external deficit and second one is internal deficit. Internal deficit due to higher wages of govt staff and external deficit due to no productive capacity. Real problem is the first one. Higher govt wages means, less capital available for private capital, meaning less investment and leading to less production. This is a spiral. Also govt wages creates artificial demand for imports leading to excess trade deficit. Only way out is to cut the govt staff by half both centre and state. Problem with that is Pakistan will cease to exist because of social unrest. There is social angle to the crisis. Islamic states are ransom seeking attitude. Only reason gulf states survive is due to oil. only islamic states that have production capacity is indonesia and malaysia. thats because their values are more aligned towards east asia. Thats because Islamic people believe thay are superior over others. this leads to mentality of not working. they extract work from others. now they cannot get from anywhere. so they are squeezing their own people and thats where the suffering starts
Why doesn't any one ask the government how come IMF programs are not completed?
Without Shabbar Zaidi, it has no importance..
Pathetic i have objections... Dr Naveed has discarded one young man's discussion and overall there they are calling the general public is Harami and Beghairat.
First Plots to Journalists and Judges should not be given
Daso jo eh saab bol rahe hain. Inno ne kvi herapheri kiyi nahi hogi. Sir blood vich chali gayi hai HERAPHERI. Pakistani herapheri KARTE Hain. Bangladeshi aehsaan farmos log hain
Pathetic i have objections... Dr Naveed has discarded one young man's discussion and overall there they are calling the general public is Harami and Beghairat. Why are you ppl asking questions when you fear other people's questions.
May Allah bless Generals who continue to loot billions of dollars from awam