Pakistan struggles to secure emergency financial assistance from IMF – Jammu Kashmir Latest News | Tourism

By Anjan Roy
About a week ago, Pakistan’s finance minister was urging its citizens to consume less tea as the country scraped rock bottom to organize even essential imports. Foreign exchange reserves had sunk to cover imports for just a few days. Every tea leaf consumed in the country must be imported.
The importance of reducing tea consumption is not easy advice in Pakistan. It is one of the biggest tea consuming countries in the world and its type of tea with milk and lots of sugar is ubiquitous in Pakistan. But now, with little foreign currency available, there would be no options unless the IMF came to help.

The country is fundamentally no different from Sri Lanka, as it is heavily indebted and on the verge of total collapse.

Years of neglect of economic fundamentals and mismanagement have left the country with a declining economy, a falling value of the Pakistani rupee against the US dollar, soaring prices and a shortage of everything you need daily.
Until now, Pakistan has been able to meet its basic needs somewhat thanks to the largesse provided by Saudi Arabia. After a large loan that has already been spent, further housing from Saudi Arabia also seemed unlikely.
Pakistan’s so-called all-weather friend China had refused to fund as a lot of Chinese money had already been poured into the field. On the contrary, Pakistan must honor its massive loan service obligations to China, which are overdue. China is also not ready to help its friend. Now it seems help is at hand. The country has started negotiations with the International Monetary Fund (IMF) for the urgent release of at least $1 billion from its $6 billion loan trance as part of a bailout. However, the IMF has set strict conditionality before funds are released.

Most importantly, the first prerequisite for a release of funds from the IMF is that the country must establish a high-level committee to investigate large-scale corruption in the country leading to the sucking of public money into the pockets of individuals. .
The IMF-recommended task force should examine government laws and procedures that allow bureaucrats and officials the ability to demand a grant for approval of projects or proposals.
Recently ousted Pakistani Prime Minister Imran Khan has repeatedly said that it was the endemic corruption of traditional political parties, which had ruined the country during its periods of clear-headed democratic intervals, which had plunged Pakistan into an economic mess. . Incidentally, the brother of the current Pakistani Prime Minister, Nawaz Sharief, has been accused of personal corruption and banned from running for elected office in the country.

After Imran Khan was ousted following a vote of confidence, the new Prime Minister, Shahbaz Sharief, had started new negotiations with the IMF to organize funds to meet some urgent imports and stabilize the economy. .

Other conditions include a sharp hike in the retail price of petroleum by levying at least Rs50 per liter of petroleum product taxes, additional tax mobilization efforts from Pakistanis of Rs.43,600 crore and an upward revision of electricity.

A declining economy and a rapid loss of credibility have prevented Pakistan from raising funds in international markets. Moreover, Pakistan has massive debts to China due to huge Chinese investments for building infrastructure far beyond the country, which could be economically utilized.

Among these projects is the port of Gawadar on the coast of the Arabian Sea which the Chinese are eager to use as a military base to extend its reach into the wider oceans. These currently fetch little commercial value.

With these expensive facilities underutilized, the financial costs alone could reduce Pakistan’s debt sustainability.

None of these could be popular in a country reeling from double-digit inflation and economic turmoil. (IPA)

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