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Begging Bowl broken' where is the truth?

13 June, 2006

By Siddiq Sajid


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Government is consistently beating the drums of gearing up the economy and befooling the masses for the last six years that it has broken the "begging bowl" and has laid the base of independent solid-based economy in the country. "Are we living in the paradise of fools? If we put up this query with President Musharaf led government, whether we have broken the 'begging bowl' then it is" definitely yes". If you are out of Musharraf's government, then it is "obviously no" and this situation will definitely raise qualms in the minds of people because it is sheer lie with them.

 

Government claimed that it has broken the 'begging bowl' and now the nation would never kneel down before the IMF, WB, ADB and other monetary institutions for 'begging' money because the government had filled its reserves due to its prudent and consistent policies.

It is an interesting thing that the foreign reserves are not meant for the expenditures on the development projects as Prime Minister Shaukat Aziz responded astonishingly to the media men in a press conference that these reserves were not meant for expenditures when asked why the government needed to hold the donor conference for the loans in Islamabad for the reconstruction of earthquake-hit areas when so much money was being contained in the foreign reserves.

But this poor nation saw with open eyes that this government took a 6.5 billion dollar loan from the World Bank just three days before the announcement of national budget for the next financial year 2006-07.

Prime minister Shaukat Aziz was publicly saying that nation has got rid of IMF and refused to accept the conditions of other international financial institutions for loans as well but this is a fact that our poor nation is under heavy burden of debts, which has reached over US$35 billion.

According to different reports every Pakistani is debtor of Rs. 18000 of a foreign loan and now the World Bank has increased its lending for Pakistan and till 2009, the bank would provide a huge amount of 6.5 billion dollars.

But the government response to the lending of these banks was also astonishing and amusing that it was the proof of the credibility of Musharraf's government that these financial institutions were looking at Pakistan to offer huge loans.

The common man is raising question that if the economy is so strong then why government is getting such a heavy loans that would be paid by the next generations.

In the next financial year, the government would pay Rs 296 billion as a debt servicing while the budget deficit for the next year would be Rs 373.5 billion, which is 4.2 % of the GDP and government would take more loans to abridge this gap.

In the next financial year's budget, government has already set a target of over Rs 140 billion for the commercial borrowing while government would have to go to international financial institutions for budgetary support . if the government does not do that then deficit and inflation both would increase and the burden again would be shifted on the already burdened common man.

According to budget documents , government would get loans and grants from 25 major countries ,financial institutions and banks . from ADB , government would get Rs. 61,856.555 million , from UAE Rs. 4600 million , China Rs. 7874.220 million , European Union Rs. 1060.400 million , France ,RS. 2110.472 million , Germany , Rs. 2555 million , IBRD Rs. 1479.371 million , IDA ,Rs. 63649 million , IDB ,Rs. 35343 million , Japan ,Rs. 5859 million , UK , Rs. 4293 million and from USA the government would take a loan of Rs. 12807 million.

Prime minister Shaukat Aziz, who himself is a banker and a expert of figures game gave a omen to nation that we have come out from the clutches of IMF but it's a fact that the conditions of IMF and its shadow are still hovering over our country in various shapes .

The main condition of IMF was to impose GST on all items including food items and today we see that there is 'No IMF' but the GST on food items is not only intact but in next budget its base has been increased and more food items are now drawn into the list of GST.

Nation questions. Where is relief ? are we free from IMF if we had a prime minister who likes the monetary policy of international institutions then what is the meaning of all these loans. The people will give only the simple response to the query by saying we are not only in the clutches of IMF and other financial institutions but also every day the burden of debt is increasing and our generations would have to return it with a heavy mark up.

 

End

Reader Comments:

NO KNOWLEDGE OF ECONOMICS

The author is unaware of even elementary economics. Foreign exchange reserves are never for spending like other money. Their purpose is to meet import needs in case other sources of foreign exchange (such as exports and remittances) are not enough during a certain period. If you save money for sudden illness or other family emergencies, you will not include it in your monthly home budget.
2) World Bank loans are for infrastructure projects that will increase national income on completion, such as dams, roads, railways, ports, etc. If a project will give a return on investment that is far higher than the interest charged by the World Bank, it makes sense to borrow. Otherwise, we shall have to save money for investment that will take a very long time. The companies borrow from banks for the same reason. It is simple common sense.

M. Hameed, Pakistan - 13 June, 2006

Nonsense

Total Rubish check CIA.gov

Sean, United Arab Emirates - 13 June, 2006

COME NOW, BE FAIR....

Okay, let's return the arrows back into their quiver and be pragmatic and civil about this.

Just a few years ago, we were on the cusp of an unprecedented economic Armageddon. Since then, we have not just added billions to our reserves, but also paid several billions off in loans, some ahead of schedule, which is no less than a roaring accolade to a poor emerging nation such as ours.

Further, any viable 'Rome' that will steadily and permanently sustain itself better NOT be built in a day, so steady as she goes, and she's looking good and she sails.

So more appropriately, the well meaning author may termed his article as 'We're Beating Back The Begging Bowl', as indeed we're starting to.


N. JAVED, United Kingdom - 15 June, 2006

Pied Pipers!

Ever since inception of the State,people have been led by
the Pied Piper to the rosy garden of never never land.

Khalid Rahim, Canada - 16 June, 2006

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