Mr. PM! There are three options to avoid IMF loan
The daily “The News” published the following on Thursday, 27 June 27, 2013 at page # 4.
Link:- http://e.thenews.com.pk/6-27-2013/page4.asp#;
Link:- http://images.thenews.com.pk/27-06-2013/ethenews/t-23752.htm
Mr. PM! There are three options to avoid IMF loan
ISLAMABAD: Renowned economist Syed Nayyar Uddin Ahmad has written an open letter to the Prime Minister Main Muhammad Nawaz Sharif, in which he has suggested three out of the box solutions to avoid taking loan from the IMF.
The following is the text of the letter:
H’able Prime Minister Mian Muhammad Nawaz Sharif Sahib;
Salaam.
I am fully convinced that you still firmly believe in the content and spirit of the subject mentioned poetry (AY TAIER E LAHOUTI USS RIZQ SAY MAUT ACHI JIS RIZQ SAY AATI HOO PARWAZ MEIN KOOTAHI), which was also the punch line of one of your elections 2013 advertisements.
However, I was really disappointed by the speech of Mr Ishaq Dar, which he delivered at the NA on Saturday, 22 June, 2013.
Hope you remember very well, how the timid Pervez Musharraf had told the nation that if he had not accepted the US demands of war on terror, Pakistan would have been bombed by the USA, to the Stone Age. Similarly, Mr Ishaq Dar had tried to scare the nation, by saying that if Pakistan doesn’t take further loan from the IMF, for the repayment of the old loans, it will go into default. By the way we’ve paid off the principal anyway, as have dozens of countries, some several times over. In any case, when Argentina, Ecuador, even Dubai, defaulted heavens didn’t fall.
Sir, perhaps you remember, in one of my recent emails it was stated that “Fatemi Sahab, don’t make Musharraf of Mian Nawaz Sharif Sahab. Remember, a timid person can be a ruler but he can never be a leader. It’s the duty of the advisors to never leave the PM or the president, in a state, where he is forced to make decisions under the influence of fear. This can only be done if the advisor informs the leader all the strong and weak points in a balanced manner.”
I also hope that Mr Ishaq Dar knows very well the dirty role of the world lending agencies as exposed in his famous book “Confessions of an Economic Hit Man” written by John Perkins and published in 2004.
According to his book, Perkins’ function was to convince the political and financial leadership of underdeveloped countries to accept enormous development loans from institutions like the World Bank and USAID. Saddled with debts they could not hope to pay, those countries were forced to acquiesce to political pressure from the United States on a variety of issues. Perkins argues in his book that developing nations were effectively neutralized politically, had their wealth gaps driven wider and economies crippled in the long run. In this capacity Perkins recounts his meetings with some prominent individuals, including Graham Greene and Omar Torrijos. Perkins describes the role of an Economic Hit Man (EHM) as follows:
“Economic hit men (EHMs) are highly-paid professionals who cheat countries around the globe out of trillions of dollars. They funnel money from the World Bank, the US Agency for International Development (USAID) and other foreign “aid” organizations into the coffers of huge corporations and the pockets of a few wealthy families who control the planet’s natural resources. Their tools included fraudulent financial reports, rigged elections, payoffs, extortion, sex, and murder. They play a game as old as empire, but one that has taken on new and terrifying dimensions during this time of globalization.”
In 1988, economist Davison Budhoo revealed in his 22-page resignation letter – more of an expose of IMF ‘expertise’ – after his 11 years with it: “When we went on a mission, we did not even have the scope to innovate, to look at the country and make projections, that you thought were reasonable… there was already a briefing paper before we entered the country. We were told what we were expected to do, and give conditionality in terms of what the fiscal deficit was and how much it should be reduced; even before we entered the mission… we were expected to structure our findings in relation to the figures in the briefing paper, which were put there without any research, and were predetermined. So the conditionality was also predetermined… In this sense, every IMF mission is fraudulent even today…”
Mr. Prime Minister, not that I am only saying that your government must not take IMF loan to pay the old loan, which will be the biggest trap for our future generations; but I have also given three out of the box solutions (at the bottom of this write up) for Pakistan, to resolve this issue of old IMF loan payments, without taking fresh loans from the IMF.
As has been reported in the media, now a days, an IMF delegation is visiting Pakistan to offer fresh loan of $5-7 billion, to be mostly utilized by Pakistan, for the repayment of old IMF loan.
It is very surprising that PML-N’s government is not working on the lines to ask the IMF to have a heart; and be patient with our loan repayments, considering the fact that Pakistan has been totally destroyed during the last 15 years of war on terror, jointly fighting with 49 NATO countries as a major non NATO ally. Moreover, this war has inflicted more men and material losses on Pakistan than the combined losses of the 49 NATO countries. As such, Pakistan has a right to be given some moratorium in its repayment of IMF loans. Even otherwise, Pakistan has already repaid more than the entire amount of the loan by partnering the West in its WOT; and also by not demanding any penny from the NATO for the military over flights to and from Afghanistan. Here, the NATO must also be reminded that at the beginning of the Iraq war, NATO offered more than $20 billion to the Turkish government, for the over flights.
Mr. Prime Minister, every student of economics knows that never to use good money to chase bad money. Hence, there is no logic in seeking fresh loan to repay the old loan. This is a sure shot recipe for disaster, just like treating a cancer patient with fake medicines. IMF should be clearly told that Pakistan was well within its rights, to have asked for the write off, of the remaining unpaid amount of their loan. However, what we are seeking is just a moratorium.
Pakistan cannot afford to pay IMF’s remaining loan, over the peril of its economic demise.
In this regard, you may also order the Foreign Office to contact all the 49 NATO governments, to garner moral and financial support for Pakistan, so that we are also able to strongly look after their interests, in providing all the necessary facilities for their troops in Afghanistan. The USA and the NATO should also be reminded that Pakistan is not charging a single penny for their military over flights, for which they offered more than $20 billion to Turkey, during the last Iraq war.
As such, Pakistan’s whole hearted cooperation in the WOT deserves matching reciprocal response in the shape of using their influence in IMF, to facilitate Pakistan by way of at least 20 years moratorium in the IMF loan repayments.
Just for your information, I am reproducing below my six questions to the then finance minister of Pakistan, Mr. Abdul Hafeez Sheikh, which remained un-replied till date, but are an eye opener, that how Pakistan was plundered by the past government.
1. Pakistan is repaying $7.6 billion to the IMF. Did we receive exactly this much amount or the total sum was less than this figure?
2. How much amount of interest Pakistan will be paying over the principle sum of this loan of $7.6 billion from the IMF? Or the IMF will be charging interest on the whole sanctioned amount of $11.3billion?
3. Did Pakistan pay and what was the total bill for the travelling, boarding and lodging of IMF delegation’s recent visit to UAE, for discussions with our economic team?
4. Besides the interest, how much service, handler’s commission and or other charges were deducted by the IMF, on its loan of $7.6 billion to Pakistan?
V.V. Important Question.
5. How much service charges or penalty was charged by the IMF to Pakistan, for not utilizing or obtaining the remaining $3.7 billion amount, from the originally sanctioned loan amount of $11.3 billion; because Pakistan got only $7.6 billion from IMF?
6. When will Pakistan get its overdue payment of $800 million from the Etisalat Telecom?
Sir, I apprehend that Pakistan was being forced to pay back the loan with penalties for not utilizing the sanctioned amount of $11.3 billion IMF loan.
Remember, we got only $7.6 billion from the sanctioned amount. As such, IMF and the West are treating Pakistan like a conquered country, rather than a major non-NATO ally in the world war on terror (WWOT).
As far as the question of generating foreign exchange is the issue, the concerned may be advised to proceed on the following lines:
1. Like India did many years ago, we may also keep our gold as a security, with some of friendly country(s), in lieu of obtaining matching amount of foreign exchange.
2. Recently Abu Dhabi helped Dubai, in its financial crisis, by providing 10 billion US dollars. We can also approach our friends to help us on the same terms.
3. As a last resort, if the West and the NATO countries have decided not to help Pakistan in our financial crisis, and they are forcing us to take the loan from the IMF, to repay its previous liabilities; and for which they are not even ready to reschedule our loans, as was done with Pakistan in the Pervez Musharraf’s era, when Paris Club loans of Pakistan were rescheduled, then instead of going for the default option, we should offer nuclear umbrella, in exchange of a reasonable amount of payment, to our friends in the gulf and the Middle East, from the Oman to Syria, who are always weary, of the Israeli nuclear blackmail. I know this will cause a lot of furor in the West led by the USA, Israel and India, but they can be told in plain words that if a nuclear Pakistan goes bankrupt, it will be more dangerous for the whole region and severely catastrophic for the world. And after all, we will be going for this option only to repay their outstanding loans, so that the coffers of the West are kept full. As far Pakistan is concerned, it has already been forced to live in a Stone Age, fighting their imposed WOT, for the last more than a decade.
Email address: nayyar51@hotmail.com
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