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PublishDate: Tuesday, September 10, 201309:59

IMF loan approved for safe US pullout from Afghanistan

IMF has approved the loan to Pakistan on the instructions of the US so that the process of withdrawal of its army from Afghanistan could be completed without any problem.

IMF has approved the loan to Pakistan on the instructions of the US so that the process of withdrawal of its army from Afghanistan could be completed without any problem while Pakistan’s successive governments had taken loans in the name of aid at strict conditions which bring a new wave of inflation.

These views were expressed by the participants in the Jang Economic Session on ‘IMF Loan -- Impact on Economy and Public’, here on Monday. The panellists were Dr Ehsan Malik, Hussain Ahmed Sherazi, Muhammad Ali Mian, Iftikhar Tabassum, Qaisar Zaman and Muhammad Yaqub while hosted by Sikandar Hameed Lodhi.

Dr Ehsan Malik said that the rulers should focus on increasing foreign remittances and reducing the inflation instead of taking loans. He said if loans are inevitable, then conditions should not be tough so that unemployment, inflation and poverty could be controlled. He stressed restructuring of state-owned enterprises.

He said the government should not take further loans from the State Bank of Pakistan and increase its income. Hussain Ahmed Sherazi said after 1998, this was the 16th loan programme of the IMF for Pakistan. He said the US wanted to keep control on Pakistan after 2014 withdrawal of its army from Afghanistan and the IMF loan is part of it.

He said the Government of Pakistan considers the loan as income or aid so that a group always keeps focus on it. He said rupee will be devalued due to the IMF loan which increased the burden of foreign loans on Pakistan while the withdrawal of subsidies to meet the loan conditions would increase the production cost and enhance inflation.

However, if restructuring of the public sector enterprises was done under loan conditions, then it would be beneficial for Pakistan, he commented. Muhammad Ali Mian said the IMF put conditions for reducing the budget deficit, increase in tax to GDP ratio, withdrawal of subsidies are in favour of Pakistan. He said the loan should be utilised properly and in right direction.

Iftikhar Tabassum said Pakistan was unable to check tax evasion of Rs 1,500 billion but had taken loan of Rs 735 billon. He said the government did not control imbalance of trade with other countries while priorities were not set on imports. He said Pakistan imported $9 billion mobile phones in one year, which is higher than the IMF loan amount.

He called for curbing import of luxurious items. He said the IMF asked for privatisation of 71 institutions under loan conditions which will increase inflation and unemployment. aisar Zaman said energy crisis was also a reason of IMF loan as previous government did not have any vision on it nor the present rulers.

He said electricity line losses reached 40 percent which was shown 11 percent while electricity tariff was further increased to meet IMF loan conditions. He said government income will not increase with raise in electricity tariff but meter readers and corrupt people’s income will grow. He believed that IMF condition will not benefit Pakistan. Muhammad Yaqub said no country in the world progressed with the IMF loan. He said everyone made tall claims of breaking begging bowl but pick biggest begging bowl than before after coming into power. (The News)

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