IMF Announces Staff Level Agreement with Pakistan on US$7.6 Billion Loan

Posted on: November 16, 2008 11:08 am Written by: Leave a Comment print for hard copyEmail This Post


IMF-Announces-Staff-Level-Agreement-with-Pakistan-on-US7.6-Billion-Loan

Press Release No. 08/285

November 15, 2008

Mr. Dominique Strauss-Kahn, Managing Director of the International
Monetary Fund (IMF), issued the following statement on Pakistan today:

“IMF staff and the Pakistani authorities have reached an agreement
in principle on the key elements of an economic program to be supported by an SDR 5.17 billion (about US$7.6 billion) 23-month Stand-By Arrangement, subject to the approval of the IMF Executive Board.

The Executive Board is expected to meet to discuss the program shortly under the Fund’s Emergency Financing Mechanism procedures.

“The Pakistani authorities have developed a policy package to help
the country meet its serious balance of payments difficulties. The
authorities’ program has two main objectives: (i) to restore the
confidence of domestic and external investors by addressing
macroeconomic imbalances through a tightening of fiscal and monetary policies; and (ii) to protect the poor and preserve social stability through a well-targeted and adequately funded social safety net.
Both objectives are an integral part of Fund support for Pakistan.

“The IMF is prepared to help Pakistan by providing a high level of
financial support on the order of 500 percent of the country’s quota in the Fund. This support is part of a broader package that includes financing from other multilateral institutions and regional development banks. I would like to call on the donor community to work together and act quickly to support Pakistan’s program in order to mitigate the impact of the current economic difficulties on the poor and ensure an adequate level of spending on development programs,” Mr. Strauss-Kahn added.

Reuters has reported today quoting Shaukat Tarin, economic advisor to the Prime Minister that the agreement will be finalized within a week.
Tarin said the interest rate would be between 3.51 and 4.51 percent,
and payments would be due between the fiscal years 2011-2012 and
2015-2016. As part of the deal, the Pakistani government agreed to
reduce excessive borrowing from the central bank and boost its tax
base, but no cuts in defense is demanded by IMF.

Earlier there were rumors that IMF wants Pakistan to decrease the defense spending besides increasing the interest rates and eliminate the subsidies on fuel and power. Government of Pakistan has already complied with increased interest rates from 13 percent to 15 percent and removed the subsidies from fuel and power. That has already created an up roar against the Zardari government in Pakistan. Zaradri came to power to provide roti, kapra and makaan, (food, clothings and shelter). The problem is government is spending very lavishly on non-productive expenses and they are borrowing heavily from the Central Bank. Dr. Shamshad Akhtar stated that in her recent press conference that governemnt has to reduce their expenses. I don’t think Zardari and Gilani will listen to her but they will be forced by IMF.

Pakistan got this loan from IMF because of the blessings of the US government. Amercia had a big say in this deal. Zardari’s position is extremely weak in the country and outside the Pakistan. Nobody trusted Pakistan government becuase they did not have any action plan to show for circumventing the current financial crises in the country. Therefore, as a result Saudi Arabia, China and so-called Friends of Pakistan did not extend any financial help (loan in the form of cash) to Pakistan.

To establish some credibility at the behests of US government, Dominique Strauss-Kahn, Managing Director of the International
Monetary Fund has mentioned in his statement that other donors should also come forward and help Pakistan. This is for encouragement to other donors that IMF will keep an eye on Zardari’s spending of loan money which other wise nobody trust him.

Are things going to get better in the country. Not really. All this IMF thing is done to avoid bankruptcy.

Filed Under: News Tagged: , , , , , ,

India Signed a Defence Agreement with Qatar

Posted on: November 10, 2008 3:03 pm Written by: Leave a Comment print for hard copyEmail This Post


India-Signed-a-Defence-Agreement-with-Qatar

Indian Prime Minister Manmohan Singh is visiting Qatar now a days. He met with Amir of Qatar Shaikh Hamad bin Khanlifa Al Thani in Doha today. They discussed bilateral relations and ways to enhance cooperation among the two countires.

During this visit Indian and Qatari defense ministers signed a defence cooperation deal which an Indian official stated as “just short of stationing troops”. The agreement includes joint training excercises, cooperation on counter terrorism intelligence and maritime security.

Gulf states have realised that India is the new name of power in South East Asia and they started developing relations with India. They already had very close economic and defense relations with India for many many years. As far as Pakistan is concerned it is a dead horse.

The only thing Pakistan is known now in the world is religious hatred, Islamic extremism and terrorism.

Filed Under: India, News, Qatar Tagged: , , , , ,

Highest Security For Former President Pervez Musharraf

Posted on: October 28, 2008 2:11 pm Written by: Leave a Comment print for hard copyEmail This Post


Highest-security-for-former-president-Musharraf
Interior Ministry has issued very strict instructions to heads of all the security agencies in Pakistan including home secretaries, frontier corps, rangers and inspector generals of all the provinces to provide foolproof security to former President Pervez Musharraf.

According to the notification issued by the Ministry, it is mandatory to provide optimum security to the former president where ever he goes. The Inspector General of the province will be responsible for his security.

A bullet proof vehicle will be provide to former president along with the security escort on evacuated roads.

Interior Ministry and security officials will stay in contact with the former president all the times.

This notification was quite unexpected. What is the reason for issuing this notification at this time is not known. Either Pervez Musharraf is not satisfied with the present security arrangements or USA has shown some concern about his security. Recently, Richard Boucher US Assistant Secretary of State visited Pakistan. There was no news that he met former president but about the security of Pervez Musharraf may have come under discussion with the government officials.

When former president resigned it was part of the arrangement that Pakistan government will provide security to former president. Further, there was an understanding that no case will be raised against Pervez Musharraf. News published in the foreign media indicated that US, UK and Saudi Arabia are guarantors of this arrangement.

Filed Under: Pervez Musharraf Tagged: , , ,

Pakistani Troops Fire Across Line of Control

Posted on: October 28, 2008 10:51 am Written by: Leave a Comment print for hard copyEmail This Post

Pakistani-Troops-Fire-Across-Line-of-Control

Press Trust of India has reported that on October 27, 2008 Pakistani troops fired rocket-propelled grenades and mortars at Indian posts along Line of Control in Kashmir state. According to this news 10 shells were fired in a half-hour period in the Poonch District. No casualties were reported. Pakistan has not reported or commented on any such incident. Should we consider this incident anything significant? This is may be too early to say. Zardari was seeking good relations with India. In such situation starting such activities means what? Did Indians attack Pakistan and now they are blaming Pakistan.

I don’t know. However, such skirmishes are rountine things on Line of Control but the timings do not match with the intentions of both countries.

Filed Under: Pakistan Tagged: , , , , , ,

Prime Minister Yousaf Raza Gilani’s Visit to America

Posted on: July 26, 2008 9:51 am Written by: Leave a Comment print for hard copyEmail This Post


Prime-Minister-Yousaf-Raza-Gilani’s-Visit-to-America

Why he is going there?
What he is going to get there?

Pakistan’s Prime Minister Yousaf Raza Gilani is going to the US
to seek political support. During this visit, the US Administration is going to
deliver some key policy messages to him.

America’s main concern is inability of Pakistan’s government
to curtail terrorist activities in the border areas with Afghanistan and
Taliban’s use of tribal areas as safe heaven.

While Pervez Musharaf’s policies were very clear on this
issue, the new government has not been able to devise a coherent policy to deal
with this issue. Americans are going to tell Mr. Gilani about their dissatisfaction in stern words. In fact, they have already told Pakistan on many occasions.

Pakistani diplomatic sources are saying that Americans have
told them that Pervez Musharraf issue will not be discussed. Pakistanis are giving
the impression, as if America is going to unload Musharraf. I believe these types of statements are for local consumption. My interpretation is that America is fed up with Sharif and Zardari’s anti-Musharraf politics. America is going to
tell Zardari and Sharif that America means business.

Pakistan government has been lobbying for some time to
persuade Washington to drop its support for Musharraf. Mr. Hussain Haqani has been instrumental in these efforts since his only credentials for being Pakistan’s Ambassador in the US are that he is staunch anti-Musharraf.

America was instrumental in drafting the NRO (National
Reconciliation Ordinance 2007) and bringing Benazir Bhutto and Nawaz Sharif back into the mainstream politics. Probably America was thinking that way Pakistan would have a government that will be more credible and stable. Unfortunately, it did not turn out that way and Asif Zardari and Nawaz Sharif have become now a
liability. Both had their own personal agendas so there was no national consensus on the real issues facing Pakistan, hence no effective government and no stability. In fact, Pakistan has become more unstable then it was before the election.

To make its previous decision work America is going to throw its full weight behind the present government. That would be the carrot but at a price. Top US military, intelligence and government leaders in Bush Administration have already shown their annoyance and dissatisfaction on the failure of Pakistan to deal with Taliban and Al Qaeda fighters in FATA and border areas with Afghanistan. Present government has been doing a lot of propaganda on their peace talks with Taliban and tribal leaders in FATA area giving the impression that these efforts are becoming successful. America wants some decisive action, and favors military force. America will give some political space and time may be six months to a year to this new government to be effective, try his peace talk option and show some results. Bush is under pressure at home to show some success in fighting terrorism in Afghanistan. American military leaders have convinced Bush Administration that Pakistan is not doing enough to stop Taliban and Al Qaeda’s fighters attacking from Pakistani areas. Hence, pressure on Mr. Gilani.

To show their support, America is going to offer besides political support economic and military aid during Prime Minister’s visit.

America is not interested in the domestic affairs of Pakistan like reinstatement of judges which is life and death issue for Nawaz Sharif and to some extent Asif Zardari, but would like to see a government who have control over the domestic problems including economy, domestic terrorism and other political issues.

Filed Under: Yousuf Raza Gillani Tagged: , , , , , , , , , , , , ,

Aitzaz Ahsan – Public Intellectual?

Posted on: July 22, 2008 4:14 am Written by: Leave a Comment print for hard copyEmail This Post


Aitzaz-Ahsan-Public-Intellectual

In the recent issue (July/August 2008) of Foreign Policy magazine they have published a so called Top 20 Public Intellectuals survey where Mr.Aitzaz Ahsan has been ranked on number 5.

Pakistan media particularly GEO TV and Aitzaz Ahsan himself seem to be proud of this ranking.

First let us see the definition of the word "intellectual". The word intellectual is an adjective. The noun is intellect. According to American Heritage Dictionary of The English Language, the meaning of the word ‘intellect’ is as follows:

The ability to learn and reason; the capacity for knowledge and understanding.

The ability to think abstractly or profoundly.

So the person who can do that is called intellectual. Fair enough.

Now let us see what profile Foreign Policy magazine has mentioned of Mr. Aitzaz Ahsan. Here is the verbatim quote;

"President of Pakistan’s Supreme Court Bar Association, Ahsan has been a vocal opponent of President Pervez Musharraf’s rule. When Musharraf dismissed the head of the Supreme Court in March 2007, it was Ahsan who led the legal challenge to reinstate the chief justice and rallied thousands of lawyers who took to the streets in protest. He was arrested several times during the period of emergency rule last year.
Today, he is a senior member of the Pakistan Peoples Party, formerly led by Benazir Bhutto, and one of the country’s most recognizable politicians".

Courtesy: http://www.foreignpolicy.com/story/cms.php?story_id=4349

Do the activities which Foreign Policy have mentioned on which he has been ranked in the ‘Top  20 Public Intellectuals’  makes someone intellectual?

If this is the criteria then we have lots of intellectuals in our country.
What do you think? What is your opinion? Write your opinion in the comments.

Please spread the word and let your friends know about Pakistan Forum. They can also join the discussions.

Filed Under: News Tagged: , , , , ,

Stock Markets Plunged in Pakistan

Posted on: July 18, 2008 6:25 am Written by: Leave a Comment print for hard copyEmail This Post


Stock-Markets
You may already have read this news in the newspapers or watched on the TV Channels.

First the news.

Yesterday, Thursday July 17, 2008 Karachi Stock Exchange 100 Index (KSE 100 Index) plunged to two years low at 10,000 then closed at 10,213 by the end of the day. Its lowest close in two years. In Karachi hundreds of investors got angry at plunging share prices and smashed the glass windows in the main hall of the stock exchange. Police was called in. The angry protesters had scuffle with police. Two persons got injured when the protest turned violent.

The angry protesters wanted to stop the trading for two days to cool down the market. But Razi-ur-Rahman, Chairman of the Security and Exchange Commission of Pakistan stated there is no need to shut down the trading and plunge continued.

In Lahore, around 100 small investors burnt tires and blocked the road to the local bourse. They wanted the government to take some action.

Similarly in Islamabad, the affected investors gathered outside the Stock Exchange and chanted slogans. Interestingly, as the newspapers reported the slogans were “Go Democracy, Go”.

Naturally, a question comes to one’s mind why Pakistani people use violent protests to resolve their political, religious or any other issue for that matter.

I could list the following reasons.

This is the way their political leaders have shown them.

People don’t believe that there is any other way to make them heard.

There are no safe guards to protect the investors.

People don’t have patience to solve their problems through legal system.

They don’t believe in the legal system.

They know from their experience that nothing will change until there is big uproar on any given issue.

There may be many other reasons. You are welcome to say what is on your mind on this subject. Comments section is for this purpose. So I encourage you write your thoughts.

Stock Markets go up as well as down all over the world. So Pakistani stock markets are not any exception. This is a phenomenon of the capital markets. This is the way markets work. So the investors have to be more smart and educated to protect themselves from such fluctuations of the market place.

When you open a brokerage account usually there is a statement on the form where you sign to accept the risks. Sometimes there is a warning also that don’t put that money in shares which you cannot afford to lose. I don’t know that is practiced in Pakistan or not.

This is the responsibility of the government to protect the investors through proper legislation including monitoring the rules and regulations of the Security and Exchange Commission of Pakistan and other such semi autonomous bodies.

For example, New York Stock Exchange requires to halt the trading if Dow drops to 2% at any given time. Do we have such rules in Pakistan? I don’t know. In the present case, KSE 100 Index dropped to 2.7% (279 points) but the chairman of the SECP gave the verdict, trading to continue. There should be such barriers and filters to protect the investors.

Unfortunately, our politicians take the violent route to protest so that is what their followers do. Is it going to change anything in near future? Probably not. The other category of individuals who can change the peoples behavior is intellectuals. Do we have such intellectuals in Pakistan? I think you are in best position to answer this question. A couple of days ago in the program Capital Talk on the GEO TV, Hamid Mir was congratulating Chaudary Aitzaz Ahasan (who was also present in the program) on his listing in “The World’s Top 20 Public Intellectuals” by Foreign Policy magazine.  I will write on this subject at some other time. But for the time being let us assume he is an intellectual then unfortunately he has also chosen to use agitation and violence to get the judges reinstated who had left the job voluntarily.

In a nutshell, the investors should educate themselves and the government should ensure the rules and regulation exists to protect the investors and there are no malpractices by either brokers or movers and shakers to change the direction of the market into their favor.

Filed Under: Stock Market Tagged: ,