The IMF disease eating away our daily bread
Pakistan’s economy has paid a huge price in partnering the war on terror with the USA. According to a recently released IMF report called “Pakistan Poverty Reduction Strategy Paper”, total losses, measured in terms of exports, foreign investment, industrial output and tax collection, are estimated to be around RS 2.08 trillion during the last five years period.
The war on terror has outbalanced already stretched financial resources of the government as a consequence the development projects have been cut resulting in increase in poverty and unemployment. The nation incurred a loss of RS 259 billion in FY 2005 and in FY 2009 it reached over RS 650 billion-indicating more than 100% increase in losses. The report indicates that FY 2007/08 has been a bad year for the economy when several unexpected political and economic events occurred.
The period of economic boom started in 2001/02 and it busted in 2006/07. During the boom period, the economy recorded several macroeconomic achievements. It doubled in size with annual GDP growth rate peaked at 7%, incredibly inflation was well under control during the boom period, the debt burden reduced to one-half, foreign exchange reserves were sufficient to cover up 6 months import, Pakistani stock market ranked among the top performers in the emerging markets, and the FDI was 6% of GDP. Given the brighter outlook of the economy, Pakistan successfully launched sovereign bonds of maturity ranging from 5-30 years and these were oversubscribed in the international capital market which reflected strong confidence of foreign investors.
The above achievements were recorded when the IMF was staying from Pakistan and the country was free t...
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...addressed immediately are; improvement in security situation and the economic governance.
The government is running out of choices as on the one hand it has to meet the harsh conditionalities of the IMF and on the other has to save the economy from total collapse-balancing the two wheels is rather a difficult job for the economic managers of the country. The harsh IMF conditions at the moment are doing no good to the economy, instead, have added to the frustration of common men. What Pakistan needs right now is a growth which is not only demand driven but job oriented which will help increase consumers’ income and standards of living of average Pakistanis. But with high prevailing interest rates, poor security situation coupled with carrot and stick game of the IMF, the task is unlikely to be achieved. Hence the growth will remain subdued in the near future.
The global economy has been recovering from the financial crisis which occurs in 2008, then has a weak growth for most developed countries over 2012 and 2013. But economic activity in Canada has expanded at a faster pace than most other major advanced countries in 2012; however, economic performance in Canada has been unsteady throughout 2013 (The Economic review, 2013). After the last quarter in 2010 GDP growth rate grows rapidly, the GDP grows slowly but steadily in 2012 which remains at around 3 percent. Real GDP growth rate in Canada grows slowly in the first quarter of 2013, but increased by 5 percent in the second quarter ,then remains the same level until the first quarter of 2014 (Statistics Canada, 2014). In 2014, the Canadian government take a series economic action plan as a guide for the economy development such as improving investment conditions, ...
In conclusion, the current macroeconomic situation in the United States is characterized by moderate growth because of better economic conditions that were brought by the events of 2013. The country has experienced moderate economic growth since the 2008 global recession but has shown real signs of momentum. While the country is not concerned about recession or inflation, the rate of unemployment is still a major challenge despite improved consumer and business confidence. As a result, the Federal Open Market Committee or Federal Reserve System needs to adopt fiscal and monetary policy initiatives that help address the unemployment issue and promote high economic growth.
In 2006 and 2007 the growth rate recovered to 3.9% and 3.4% but then dr...
During the course of this paper, we hope to give the reader a better understanding of the economic forces at play that influence this Nation's GDP, in therefore its economic health.
The easy availability of credit in U.S, Russian debt crises and Asian financial crises of late 90’s showed the way to a housing construction boom in the USA. The relaxed lending rules and increasing property prices along with the increase in foreign funds added to generate this real estate bubble.
Unemployment is a big problem in this society, because it constitutes the waste of resources. There is a possible chance that it leads to poverty for those who are out of work. High unemployment is a pointer of bad national economic performance, vice versa...
Subramanian, Arvind. India’s Economy is stumbling? The New York Times. August 31, 2013: A19. Print.
In 2012, India contributed 5.8% of total foreign direct investment in the UAE, making them the second top foreign investor (“United Arab Emirates”). Additionally, Indians are one of the UAE’s top investors in real estate. In 2015, Indians invested 18.12 billion dirhams in UAE real estate (“What Makes Indian”). Foreign direct investments in the UAE have played a vital role in keeping the economy stable in times of market fluctuations. Consequently, GDP rose 4.6% in 2014 (John “UAE Draws”). Although it is hard to say how much of this GDP increase is directly due to India or Indian immigrants, we can infer that they caused a large portion of it since they are the second top foreign investor in the
The IMF was not designed to be an aid agency but its role in economic
In order to assess the current state of the economy, the examination of important economic indicators or variables has always played a vital role in the understanding of the complex economic systems we live in. The analysis of these economic variables studied by many, not only has served as a tool to evaluate the current economic performance of a country, but also has allowed experts to envisage and continue the pavement of an economy's road. Currently, some economic variables have had favorable improvements indicating a general good outlook for the economy for the following months, requiring a further individual analysis and comparisons in order to foresee crisis or successes.
And by this all economy get a boast. People started getting better off and government got success keeping the interest of investor in economy. Balance to payment went down to 5, which is not bad. Bibliography Books 1. Diulio, Eugene A. Theory and Problems of Macroeconomic Theory.
In order for any country to survive in comparison to another developed country they must be able to grow and sustain a healthy and flourishing economy. This paper is designed to give a detailed insight of economic growth and the sectors that influence economic growth. Economic growth in a country is essential to the reduction of poverty, without such reduction; poverty would continue to increase therefore economic growth is inevitable. Through economic growth, it is also an aid in the reduction of the unemployment rate and it also helps to reduce the budget deficit of the government. Economic growth can also encourage better living standards for all it is citizens because with economic growth there are improvements in the public sectors, educational and healthcare facilities. Through economic growth social spending can also be increased without an increase of taxes.
We must avoid the temptation if at any given time our individual national economy is more prosperous than those of our other partner states, to be so arrogant as to forget that our economic situation may be suddenly reversed and that therefore we will soon need close links with our partner states in matters concerning both the intra-regional and extra-regional spheres. West Indian history abounds with instances of countries suffering sudden reversals of their economic fortunes.
“India was a latecomer to economic reforms, embarking on the process in earnest only in 1991, in the wake of an exceptionally severe balance of payments crisis”(Ahluwalia 2002).The idea being simple ,there was a need to ...
Pakistan is facing energy crises due to increase in demand, a poor management and lack of investment in our energy resources. Our energy needs depends upon oil and gas. We have to import about 30% energy in the form of crude oil, coal, LPG etc. [5]