The IMF is Pakistan’s new Government-- Economic Collapse -- Stock Market Crash .

The International Monetary Fund (IMF) is Pakistan’s new government. When it comes to major economic decisions, that is. IMF sets the policies that will either make or break the country’s economy. Early this month, the Washington-based institution gave Pakistan a $6 billion loan that helped the newly-elected government of Imran Khan cope with large government and current account deficits, and soaring debt. In a statement, the IMF said Pakistan faces a "challenging economic environment, with lackluster growth, elevated inflation, high indebtedness, and a weak external position". It said the funding programme would support the authorities' strategy for stronger growth by "improving the business environment, strengthening institutions, increasing transparency, and protecting social spending". IMF bailout funding is typically provided under strict conditions, and some analysts have warned that any fresh IMF injection could harm Prime Minister Imran Khan's pledges to build a welfare state. Since he was sworn in last August, Mr Khan has been aggressively pursuing help from friendly countries in order to reduce the size of the bailout package that Pakistan may need from the IMF. The country has faced a potential balance of payments crisis - where a nation struggles to meet external debts or pay for critical imports - due to a stagnating economy. Pakistan, a nation full of potentials both in culture and economy, has been facing serious challenges in the past 30 years and its economy is not even close to reach its full potential. As a result, Pakistan’s economic future is at a crossroads. Past large deficits, the high cost to buy a rupee, and the lack of reforms have undermined growth. In an attempt to restore strong and sustainable growth, Pakistani government has received a loan from the International Monetary Fund (IFM). The IMF wants Pakistan to increase the proportion of its people who pay taxes and for the government to reduce public debt. Many say most of those targeted by new reforms are the poor or the struggling sector. The government along with the IMF believes that increase of taxation can have a good outcome if Pakistan manages to have a significant increase in resources allocated to key social assistance programs, supports measures for the economic empowerment of women, and invests in areas where poverty is high. The IMF's conditions are money-related on the paper, but there are other changes that make people think the organization is taking over their world. Pakistani officials have revealed that a former IMF mission named Reza Baqir has been appointed as the governor of the State Bank of Pakistan. Pakistan’s Government Budget deficit and Current Account deficits reached 6.60% and 5.80% of the country's GDP, respectively, in 2018. Meanwhile, the country accumulated a government debt equivalent of 72.5% of GDP in 2018, up from 67.20% in 2017; and external debt jumped to 105841 US Dollar Million in the first quarter of 2019, from 99086 US Dollar Million in the fourth quarter of 2018. And foreign currency reserves and foreign capital flows have been falling rapidly. That’s why the country had to appeal to China and Saudi Arabia for loans to deal with the situation. The IMF forecasts Pakistan's economic growth will slow to 2.9% this fiscal year from 5.2% in 2018. In February, the central bank had only $8bn left in foreign reserves. Abdul Hafeez Shaikh, an economic advisor to the prime minister, said that foreign loans have now exceeded $90bn, and exports have registered a negative growth over the past five years. "So Pakistan will get $6 billion from the IMF, and in addition we will get $2 to $3 billion from the World Bank and Asian Development Bank in the next three years," said Mr Shaikh, according to the AFP news agency. China’s Foreign Minister, Wang Yi, visited Islamabad recently, and left declaring that China has not “inflicted a debt burden on Pakistan.” China has also agreed to incorporate more social development projects into CPEC. Concerns over Chinese financing of projects grew after Sri Lanka, where many billions of dollars of agreements with China were made under former president Mahinda Rajapaksa, ended up seeing his successor Maithripala Sirisena having to hand an entire port to China on a 99-year lease. China also has a 70% equity stake in the port. For many countries involved in China’s Belt and Road Initiative, Sri Lanka is now a cautionary tale: too much debt, too fast, with a worrisome lack in transparency. Pakistan is among eight countries—as farflung as Djibouti and Montenegro—with worrying levels of debt with China. US secretary of state Mike Pompeo has called on the IMF to reject the request for a bailout, saying the money shouldn’t go to repay China.(A Pakistan envoy in Hong Kong said last week the crisis the country is facing is not due to repayments to China, but because of rising oil prices that have led foreign reserves to shrink.) Without a bailout from a multilateral lender, though, Pakistan might find the only solution to its current crisis is more Chinese debt, not less. Taking IMF money is selling out every one in your country; every man, women and child. Once you go IMF, it is a slippery slope towards banana-republic-hood.










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