Yea tou wohi jagah hay guzray thay ham jahaan say
Hakim thay sa’ray choor aur lut’tay thay ham raza say
Sovereignty of a country is as good as its economical condition. Pakistan went into the clutches of IMF in early 1980s (during the time of Zia-ul-Haq) and did not come out of it until December 2004. Being in IMF clutches is just like being in clutches of USA. Pakistan was the first country to come out of IMF clutches something very rare. Countries that goes into IMF clutches become slave of IMF, implementing programs dictated by IMF regardless of it is good for country or not, and usually do not come out of IMF clutches.
Zia-ul-Haq took Pakistan into slavery of IMF, Musharraf took Pakistan out of that slavery, but it seems that Pakistanis love slavery and thus they decided to bring back two thugs who are going to take Pakistan back into the Slavery of their old master, IMF again. What a turnaround story.
Here is a report of Pakistan at the time Pakistan came out of IMF clutches. It seems that we are going back into same situation again. How sad. Anyhow, congratulation to supporters of choors and dakus, who voted for them and expected anything better from them.
Ref: Dr. Nayyar Ali
(Pakistan Links)
By Dr. Nayyer Ali
January 07, 2005
IMF Give Pakistan an “A”
The International Monetary Fund, the last hope of spendthrift countries with collapsing currencies and busted budgets, bid farewell to Pakistan in December. After 20 years of violating every IMF bailout agreement it signed, Pakistan actually completed an IMF program and has “graduated” out of the fiscal doghouse.
The IMF issued its final review of Pakistan’s economy in December, and it can be downloaded from the IMF website (IMF.org), but let me review its highlights. According to the IMF economists, Pakistan in 1999 “had virtually run out of foreign exchange reserves and public debt obligations were not being met.” Also, “economic growth had slowed to an average of below 3%” from fiscal 97 to fiscal 1999. Fortunately, new economic management rapidly got Pakistan out of the severest depths of this crisis by early 2000. The IMF looked at the issue of whether Pakistan’s subsequent economic recovery was “homegrown” or the result of foreign assistance flowing from 9/11 policy change. **They concluded that although 9/11 had some favorable effects, it also had negative short-term effects on the economy, and the overall upswing cannot be attributed simply to that. In their phrasing “domestic adjustment seems to have been the key to the macroeconomic improvement, although external factors played some role.” **
The key change has been a rapid decline in the size of the debt burden. Over the last four years, debt as a percent of the GDP has dropped from 90% to 63%. **This has been coupled with a rapid improvement in GDP growth, **which over the last three years has been even better than India’s on average.
Economic reforms in the banking sector have been very successful. The trade policy is now the most liberal and open in South Asia, and overall the “role of the state in the economy has diminished and governance improved.”
**Industrial expansion has been the leading engine of this economic recovery. **This reflects a fairly open internal economy and vibrant demand for manufactured products. There is a point of contrast with India, whose growth has been led by the service sector, while their industrial growth over the last ten years has been sluggish. Pakistan’s growth has been financed by rising investment, which has climbed from 17% of GDP to 20% this year.
A significant development has been the acceptance of the IMF of the re-basing of Pakistan’s economic statistics. This was carried out in 2003-2004 budget cycle, and revealed the economy was 20% larger than the older statistics stated. Based on the new numbers, Pakistan GDP this year is 104.5 billion dollars and GDP per capita is 690 dollars. This puts Pakistani GDP per capita about 7% higher than India’s. My view is that this gap is real, and that it will expand over the next ten years significantly as the Pakistani economy outperforms India by 1 to 2 percent per year. What is even more interesting is that since Pakistan has a higher percentage of children due to higher birthrates, its GDP is being generated by (proportionately) fewer actual workers. GDP per worker in Pakistan is probably 15-20% higher than India.
Overall, the IMF found that Pakistan is “now much better placed to cope with potential shocks than at any time in the last decade.” In addition, they cite a World Bank analysis that found it is easier to enforce contracts or start-up a new business in Pakistan than anywhere else in South Asia. Time to start a business is now down to 24 days.
The IMF notes the government plan to raise growth to 8% per year. They characterize this as aggressive but achievable. 8% per year is about the highest rate of sustained g rowth that even the best performing economies can achieve.
The IMF ran a medium growth (6% per year) and high growth scenario (growth accelerating to 8% by 2007). Under the high growth scenario, Pakistan reaches a per capita income of 1000 dollars in 2009. Even under the medium growth scenario, Pakistan reaches 1000 dollars around 2010. In purchasing power (PPP) terms, that would correspond to about 3500-4000 dollars per person, and would make Pakistan a middle-income country. **The growth of the last three years has allowed real spending per capita on education to climb 12% per year, and on health at about 8% per year. **
Musharraf and Aziz can be criticized on some points, but hats off for giving Pakistan its best economic policies in its history. Millions will be lifted out of poverty as a result of this growth. Comments can reach me at [EMAIL=“[email protected]”][email protected].
