IMF doubts Pakistan’s capacity to repay loans, delays visit of mission

The Pakistan Economy Watch (PEW) on Sunday said it would be difficult for Pakistan to secure another bailout package from the IMF to avoid looming crisis of external payments.
Pakistan enjoyed good relations with the US in 2008 when it got 7.6 billion dollar-loan after two weeks of negotiations but now the situation is different, it said.
“At present, our relations with the US are tense, IMF is focused on European crisis and unhappy over our failure to introduce reforms,” said Dr Murtaza Mughal, president PEW.
IMF doubts Pakistan’s repayment capacity; it is in no hurry to lend more to enable Pakistan to return 4.3 billion dollars in the next fiscal, he said.
He said Pakistan had already taken IMF loans exceeding quota by 200 percent while there were no plans to introduce any reforms which has frustrated IMF to a point that it has delayed visit of the mission.
Dr Murtaza Mughal said that our economic managers “can paint a rosy picture of economic miracles to please masses but cannot lure IMF officials who are well aware of the situation”.
The Finance Ministry’s claim of a 21 percent hike in remittances touching $13.5 billion reflected the trust of expatriates in policies of the government, which was not reality.
“In fact, they are sending more money due to rising poverty,” he noted.
“They know that Pakistan’s current account’s gap has increased to $12.6 billion compared to last year’s $ 8.4 billion, foreign investment has nosedived by 65 percent and short-term receipts remained zero.”
Similarly, he said, expressing pleasure over loans of World Bank could help satisfy electorate, but it had nothing to do to cope with balancing the payments.
The government might not get $80 billion any time soon that it claims NATO forces owe for its contribution to the international war on terror.
Similarly, there were no chances that other donors would help the country cope with the crisis in the making, therefore, government should think seriously about alternatives, said Dr Mughal.