IMF's Fund | In terms of the economic conditions of Pakistan

In the past several months in Pakistan, due to uncertain economic situation last week, the government and the World Financial Institutions (IMF) agreed on a $ 6 billion loan agreement, and it was told by IMF on Thursday that it The amount will be given under the 'Extend Fund Facility' (EFF)

In the form of ordinary Pakistani mines, IMF sounds like the first word in terms of debt and other conditions.

IMF has ten different types of projects for the loan and the institution determines the need for every country and economic difficulties after it decides which program will be better for this country.

In terms of the economic conditions of Pakistan, two of these programs are very important that are 'Standby Management' (SBA) and 'Extend Fund Facility' (EFF).

The determination of both of these interest rates is linked to global market changes.

Pakistan has already gone to the World Finance Organization for 21 times, 12 of them SBA and five times EFF loan.

Three times the loan was acquired under 'Extend Credit Credit Facility' (ECF) and once the 'Structural Adjustment Facility Committee'. The last loan taken by the Government of Pakistan Muslim League Nawaz was also taken under the EFF.

The difference between SBA and EFF

There is a big difference between these two projects. The SBA, IMF is the main project for developing economies. Usually this is given to those countries who need a loan to bring balance in payments in less time. This plan is two to three years and refunds are in three to five years after payment.

Its interest rate is according to the global market, but according to IMF it is always less than other private loans.

Former Secretary Finance, Dr wakar Masood told media that 'the duration of the SBA is also reduced, it also reduces the conditions and it is given when you are running on the pre-reform program. But you need some more help to complete it.

He said that in the past it has been happening that the countries who took an IMF reform loan but could not fulfill the targets set out in the conditions, were given more loans under standby management for their support.

On the contrary, EFF is a mid-term program, not only the balance in payments but also its focus on the country's economic structure.

This project is three years old, but it can extend to one year, while refunds are done within four to ten years.

According to IMF, keeping reforms in the country's economy and taking advantage of it, it is necessary for reforms that require time, therefore EFF's duration is high.

Dr. Masood reports about the EFF that this loan is given when the budget deficit increases, the difference between foreign payments and exports and imports will increase and you do not have any choice. If you want IMF to be monitored for a long time, then EFF yourself. "

He said that focuses on making three major central reforms under the EFF, including energy sector, tax system changes and government companies, including reforms in deficit organizations.

Under this program IMF not only gives money but also technical support

Here, it is also necessary to understand that the money given by the IMF goes to the State Bank of Pakistan and the government can not start development projects from these funds, while on the steps and costs of the IMF government It takes different conditions.

Under the EFF project, the country's borrower is responsible for implementing the applicable terms and conditions.

Who decides the nature of debt?

There are also four projects of IMF loan programs that are neutral and it is for countries who suffer from crisis.

The question is why why not Pakistan get these easy terms and who will decide which loan will be generated under the project.

Dr. Masood says that there are talks between the IMF and the lending country about the program. The IMF itself reviews whether the SBA will be better in this country or the EFF and the other is also assessed how much the loan they want on this occasion.

He said that in the end it is on the power to deal with you. If you are going to take a loan from any bank, how is your preparation, the difference between your own self-confidence in which you are negotiating.

Dr. Masood said that in connection with the recent program, Pakistan's unfortunate fact that two of us have made talks with us, one of whom has called for a team of welcome, and then a new team came to negotiate, then our power No.'

Where will Pakistan spend money coming from IMF?

After the negotiations between the World Financial Institutions (IMF) and the Pakistani government's representatives, the initial agreement has been made to provide $ 6 billion loan.

Advisor Finance Dr. Abdul Hafeez Shaikh said that the IMF program will be processed after its approval by the Board.

Dr Abdul Hafeez Shaikh said in an interview with government TV that the IMF program will have the opportunity to improve structural reforms and exports and products to solve the problems of government deprived institutions. Successful implementation and structural reforms are crucial for the IMF program for sustainable development and prosperity. He said that with this amount the government will pay some old loans, including IMF's debt.

According to the Minister, besides this, money can be used to pay interest on loan as well as financing of imports, fund account deficit financing and budget assistance.

On the question of taking loan from debt, Minister of State Hamad Azhar said, "Unless we will make strategic reforms in our economy, which means that they have complicated and fundamental problems that prevent the income of your economy. You will not be able to return your debt till done. '

Pointing out these complex issues, he said, "Our country collects income from exports. In the past ten years our exports have been very low, and in the past five years there has been negative adversity.

According to the Minister, the tax base in the country is very low, always the delicate level of reservoir reserves and factors responsible for the state's economy of living in the constant loss of government institutions. He says that doing the right thing will not increase government revenue and Pakistan can not return its debt till then.

He said that the IMF program will improve further and the government's financial deficit will also come down and external losses will be kept in a balance.

Expert Economy, Caesar Bengali, said that this money will cover the country's old debt.

He said that 'Pakistan's debt for a long time only uses its old debt to pay and it will be used.'

He said about government statements of reform reforms in the national institutions that 'it is a matter of air.'

He said that such loans were taken in the past and the same thing was done. He criticized Advisor Finance Dr. Hafeez Shaikh, saying, "From 2008 to 2013, he was himself the Federal Minister for Finance, then he could not do this, then how he would fix the situation."

Expert Economy S. Akbar Zaidi told the BBC that this money is a loan that we have to return after three years.

He said that the World Bank, the Asian Development Bank and IMF, have a lot of difference, the World Bank or Asian Development Bank give us credit for spending in education, health, energy sector or dam IMF's loan is given to maintain balance in financial deficit and government payments.

He said that the commercial deficit would worsen in the value of rupees compared to the dollar, then the State Bank could use this amount to fulfill.

Expert economist Dr Nadim ul Haq said that the debt found under the IMF program is not used anywhere, it is kept in the only reserve.

In his opinion, 'IMF's program is that the country, which is caught in their torture, could properly manage its exports.'

He said that under the IMF program, it is determined how to improve the issues of Pakistan's payment.

According to them, the debt to Pakistan will improve in the domestic deficit because IMF reduces losses through policy.

They said therefore, the change in the country will increase due to the change in policy by the IMF, the value of rupees will decrease, poverty and unemployment will increase, all sorts of subsidies are terminated. Gas, gas and electricity prices will increase. And its load will be on the normal user and the domestic economy.