Myth that Pakistan gets billions in US aid: Hafeez

[Geek]

WASHINGTON: Pakistans finance minister on Monday dismissed as a myth in the United States that his country is a major recipient of tens of billions of dollars in US aid.

Finance Minister Abdul Hafiz Shaikh told an audience in Washington that the United States had not delivered what it promised under the Kerry-Lugar-Berman Law aid package, which is meant to provide $7.5 billion in civilian aid over five years.

The law authorized $1.5 billion a year.

There is a perception that there is a lot of money going to Pakistan, Shaikh told the Woodrow Wilson Center policy think tank.

It is largely a myth that Pakistan is a beneficiary of tens of billions of dollars. The truth is that in the Kerry-Lugar-Berman arrangement this year we have not even received $300 million, he added.

Pakistan is dependent on foreign aid and plagued by political instability and violence. Massive floods last year, the worst natural disaster the country has ever seen, affected three million people, destroyed crops and swept away roads and bridges, causing over $10 billion in damage and wiping out about 2 percentage points of gross domestic product.

Washington has long pressed Pakistan to take on militants who have taken refuge in Pakistani border sanctuaries from where they attack Western forces in Afghanistan.

Shaikh, who attended weekend meetings of the World Bank and IMF, said Pakistan wanted trade, not aid.

Were saying lets open our markets to each other, he said, pointing to successful negotiations with the European Union that have expanded areas of trade.

He said the Kerry-Lugar-Berman Law was an important symbol of the US government and Congresss commitment for a new democratic government in Pakistan.

If it is disbursed in a proper way and implemented in a proper way, then it can have far-reaching consequences for the people of Pakistan, he said. It would alter some misperceptions that are there. Pakistan is a heavily indebted country, with its external debt amounting to about $58 billion and domestic debt at 6 trillion rupee ($70 billion).

The country turned to the International Monetary Fund for an $11 billion emergency loan in 2008 to avoid an economic meltdown. Shaikh said the economy had shown signs of improvement although the government was still trying to broaden its tax base to include untaxed sectors, such as agriculture. Reuters

http://www.dawn.com/2011/04/19/myth-that-pakistan-gets-billions-in-us-aid-hafeez.html

 

[Muhammad Tauseef A. Bajwa]

Pak team returning without money

Pak team returning without money

By Anwar Iqbal |

A privilege motion has been moved in the National Assembly against the finance minister for saying that lawmakers are preventing the government from implementing tax reforms.AFP photo


WASHINGTON: The Pakistani delegation to the International Monetary Fund-World Bank spring meetings is returning home without any understanding on the release of the final instalment of an $11.3 billion loan package.

Pakistan has already received more than $7 billion in five instalments. The 6th tranche, however, remains suspended since May 2010 because of the countrys inability to meet performance benchmarks attached to the standby arrangement.
There are no indications that the delegation was able to convince the IMF to release the next tranche, a diplomatic source told Dawn.

And until the 6th tranche is released, it is highly unlikely that the IMF will hold any negotiations on a future arrangement.

Islamabad had earlier indicated that it might seek another loan arrangement of about $3.2 billion to meet its financial obligations and to repay earlier debts. Pakistan has borrowed more than half of its $50 billion external loans from the IMF, the World Bank and the Asian Development Bank.

But the countrys economic performance is so poor that it is difficult to imagine how they could have convinced the IMF to release the next tranche, the source said. This was not a good trip for the Pakistani delegation.

Pakistan still has about two months to implement at least some of the reforms the IMF recommended to qualify for the 6th instalment and to seek a new package. Pakistan is expected to send another delegation to Washington next month or in early June for more talks on continued international assistance to rescue its ailing economy.

The IMFs concerns revolve around a rising inflation, a widening fiscal deficit, exemptions incorporated in the reformed general sales tax and energy subsidies. During talks in Washington, experts referred to a notification the government of Pakistan issued on April 1, giving exemptions to textiles and leather and sporting goods from the RGST.

The IMF argued that since these were the biggest income generating sectors, giving exemptions to them will further weaken the governments ability to raise money, particularly when it was reluctant to impose agriculture tax. Referring to a privilege motion moved in the National Assembly on Monday against the finance minister for saying that Pakistani lawmakers were preventing the government from implementing tax reforms, a diplomatic source said: These are internal political pressures but they cannot convince donors to give more money unless the Pakistanis take immediate measure to reform their economy.

The IMF is believed to have warned the Pakistani delegation that if they did not take immediate remedial measures, their deficit may go up to 6 per cent by the end of the current fiscal year. Experts noted that India also had a high deficit but their growth rate was also between 9-10 per cent compared to Pakistans 2 per cent. Pakistans inflation rate, already between 13 to 14 per cent may also go further up. And in the current situation, taking more loans will bring more pressures on the economy, IMF experts warned.

While pointing out that the government cannot afford to continue to subsidise the energy sector, the experts referred to various figures released in Islamabad. According to these statistics, the government was spending Rs46 billion a year on servicing the old circular debt in the energy sector.

This year the government will face another deficit of Rs256 billion because of increase in oil prices. The electricity loss costs the government Rs256 billion a year, which is more than its total expenditure of Rs165 billion.

Experts noted that with population growth rate not slowing down, youth unemployment at almost 50 per cent, less than 5 per cent investment in public sector development and with a 10 per cent tax to GDP ratio, Pakistan could not hope to revive its economy without drastic reforms.

 

[hans]

I am very sorry..... but I need to pen my input

Remember Waheed's Nihari at Burns Road... before you walk in the main door next on the platform there is a line of Poor and Drug addicts waiting in line for a plate of Nahari.

If you observe, the most striking part those set of beggars, in just one evening they will consume 3 to 6 plates of nahari and Roti and still look hungry. Best part they will convince you that they have not eaten in the past few days. Now compare the title of this post to what I just said.....

Same is the case of This man ....Calling Pakistan habit of asking for Financial Aid as a Myth!!!!

LOL @!!!!!! [hilar][hilar][hilar][hilar]

 

[Muhammad Tauseef A. Bajwa]

Myth that Pakistan gets billions in US aid: Hafeez

Reuters

Pakistani Finance Minister Abdul Hafeez Shaikh speaks at the Woodrow Wilson International Center for Scholars in Washington, DC, April 18, 2011. Photo by AFP



WASHINGTON: Pakistans finance minister on Monday dismissed as a myth in the United States that his country is a major recipient of tens of billions of dollars in US aid.

Finance Minister Abdul Hafiz Shaikh told an audience in Washington that the United States had not delivered what it promised under the Kerry-Lugar-Berman Law aid package, which is meant to provide $7.5 billion in civilian aid over five years. The law authorized $1.5 billion a year. There is a perception that there is a lot of money going to Pakistan, Shaikh told the Woodrow Wilson Center policy think tank.

It is largely a myth that Pakistan is a beneficiary of tens of billions of dollars. The truth is that in the Kerry-Lugar-Berman arrangement this year we have not even received $300 million, he added. Pakistan is dependent on foreign aid and plagued by political instability and violence. Massive floods last year, the worst natural disaster the country has ever seen, affected three million people, destroyed crops and swept away roads and bridges, causing over $10 billion in damage and wiping out about 2 percentage points of gross domestic product.
Washington has long pressed Pakistan to take on militants who have taken refuge in Pakistani border sanctuaries from where they attack Western forces in Afghanistan.

Shaikh, who attended weekend meetings of the World Bank and IMF, said Pakistan wanted trade, not aid. Were saying lets open our markets to each other, he said, pointing to successful negotiations with the European Union that have expanded areas of trade. He said the Kerry-Lugar-Berman Law was an important symbol of the US government and Congresss commitment for a new democratic government in Pakistan.

If it is disbursed in a proper way and implemented in a proper way, then it can have far-reaching consequences for the people of Pakistan, he said. It would alter some misperceptions that are there. Pakistan is a heavily indebted country, with its external debt amounting to about $58 billion and domestic debt at 6 trillion rupee ($70 billion).

The country turned to the International Monetary Fund for an $11 billion emergency loan in 2008 to avoid an economic meltdown. Shaikh said the economy had shown signs of improvement although the government was still trying to broaden its tax base to include untaxed sectors, such as agriculture. Reuters