8/7/2019 Pakistan rejected the Kerry but accept the imf

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Pakistan rejected the Kerry-Lugar bill as an affront to their honor and interest but

corporate media activists seem to care less about the conditions imposed by the IMF which

translates into more misery and poverty for ordinary citizens.

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Some special interest groups in Pakistan rejected the Kerry-Lugar bill as an affront to their honorand interest but corporate media activists seem to care less about the onerous conditions imposedby the IMF which translates into more misery and poverty for ordinary citizens.

In November 2008 the International Monetary Fund approved a 23-month Stand-ByArrangement for Pakistan in an amount equivalent to US$7.6 billion to support the countryseconomic stabilization program. The total amount of the IMF resources made available under thearrangement equals 500 percent of the countrys quota. The arrangement was approved by theIMF Board under the Funds fast-track Emergency Financing Mechanism procedures.

The fiscal policies of General Musharafs rule (FY2007/08) had put the country at the brink ofbankruptcy. The external current account deficit had widened to a record level; net capitalinflows declined significantly, and currency depreciated substantially. A delay in the pass-through of higher international prices to domestic consumers led to a large increase in the fiscaldeficit, and its monetization by the State Bank of Pakistan contributed to rising inflation and a

sharp decline in international reserves. Pakistan was unable to secure funds from any othersource so the IMF loan appeared to be a godsend.

It sounds funny but my Executive Producer was following this story so keenly that he woke meup in the middle of the night to say that the first installment had hit the countrys Central Bank.

Generally speaking there was no criticism like a borrower with poor credit history who signsaway their first born to a sub-prime mortgage, the Pakistani media blindly let it slide.

No one raised an eyebrow that the IMF required Pakistan to raise the power tariff by 24 percentduring the current fiscal year in three phases six percent in the October-December quarter, 12

percent in January-March and six percent in the April-June period. A 4.4 percent tariff increasewas announced in October 2009, and now a notification is pending for an additional 13.6 percentincrease.

IMFs stated objective for this arrangement was two fold: to restore macroeconomic stabilityand confidence through a tightening of macroeconomic policies; and to ensure social stabilityand adequate support for the poor and vulnerable in Pakistan.

8/7/2019 Pakistan rejected the Kerry but accept the imf

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