What are the Real Reasons For The Delay in the Approval of IMF Program | Dr Khaqan Najeeb Analysis - video Dailymotion

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00:00It is a matter of getting a loan of 7 billion dollars. Why has it become such a mess?

00:09Bismillahir Rahmanir Rahim. Ashfaq bhai, one thing is very clear that running Pakistan without the support of IMF is not prudent policy making.

00:17And it will be very painful compared to if we stay with IMF and any such thing that creates uncertainty is removed.

00:26If you look at it currently, it is a macro stability. What does it mean?

00:30We have slowed down the economy.

00:32As a result of this macro stability, inflation is downward trending.

00:36The loss of the current account has been managed.

00:38Pakistan's reserves have consequently gone to an import cover of two months.

00:44Remember, they had dropped below the import cover of one month.

00:48So, there is a stability.

00:50Doctor, so what we have done, is it done in an artificial way or is it organic?

00:54It is the consequence of the engagement with the fund.

00:59Any country, when it is in turmoil, the reserves were below 4 billion dollars.

01:04Loss was happening consistently.

01:06So, IMF has given a tight monetary policy, slowing of the economy, by imposing new taxes on Pakistan.

01:14To manage that, it is necessary to go to an extended fund facility.

01:19And for that, a staff level agreement was made on 12th July.

01:22But I say again and again, going to the IMF, Mr. Ashfaq, is the certainty.

01:28But what program is decided, that is not a certain thing.

01:32It is largely open to authorities, what kind of program they decide.

01:37Because this is not an IMF program, Mr. Ashfaq.

01:40This is a program of Pakistan, supported by an extended fund facility of the IMF.

01:48Now, when I will present it in this way, you will say that we should have carried out the taxes in a different way.

01:55We should have kept the expenditure reform at the centre stage.

02:00So, what I am trying to say is that in this negotiation, when you…

02:04Doctor, I would like to…

02:06Yes.

02:07I would like to…

02:08Obviously, we want that the understanding on this issue is in a very simple way for the common man.

02:14So, for a common man, please try to explain to us, what are our problems,

02:19because of which a staff level agreement was made on 12th July.

02:22After that, it was said that there will be no such difficulty.

02:25So, what are the things that we have to do, after which we will get this facility?

02:31Sir, look, whenever this is decided, an external financing is decided.

02:37How much external financing do we need in this financial year?

02:40It was decided that it was close to 26 billion dollars.

02:43Okay.

02:44Its commitments are…

02:45Okay.

02:46And maybe Pakistan can understand that it can be fulfilled even less than 26 billion dollars.

02:50But the fund thinks that it needs 26 billion dollars.

02:53In that, 12 billion dollars…

02:54Okay.

02:55Mr. Ashfaq, 4 billion dollars of China, 5 billion dollars of Saudi Arabia, 3 billion dollars of UAE.

03:00It is not difficult for us to give.

03:02We have 9 billion dollars of savings.

03:04We cannot give 12 billion dollars.

03:06So, we have to say to these countries that for one year, please postpone their payment.

03:11The fund is saying that you should convince the executive director, who is on their board,

03:17to come and say that Saudi Arabia will postpone 5 billion dollars.

03:21I think that they should have made this confirmation on the 12th of July.

03:26Anyway, there is a delay of 2 months.

03:29Now, I don't want to sound alarmist, but what is the complication in that?

03:34The complication is that when you say to China to postpone 4 billion dollars,

03:38and also to postpone the debt of IPPs,

03:41and also to give back their 500 billion dollars,

03:44if all these things come under negotiation, then many dots have to be added.

03:50I think that is where it is taking more time than required.

03:54This is one thing.

03:55Similarly, you said to Saudi Arabia that now the fund is saying to give us 2 billion dollars more.

04:00For that, you said to give us an oil facility.

04:03If not an oil facility, then direct funding.

04:06You started a conversation.

04:09Then you opened a new door with them.

04:12Then you needed commercial funding of 800 million dollars.

04:15For that, you went to UAE banks.

04:18So, now you are getting the picture that the picture is not that simple.

04:23There are many dots to connect.

04:25I am sure that the authorities are trying their best.

04:28But I have always said this.

04:31Dr. Sir, we used to say that the Nooli government,

04:37the Mian Sahibaan,

04:39they have very good terms and ties with the Saudi government.

04:42For example, they used to give oil.

04:44And whenever there was a difficult time, we used to go there.

04:47So, we used to get some support from there.

04:50But now, the relations of these countries are not personal.

04:54Obviously, they are based on interests.

04:56Because of this, the relations of neighboring countries have improved.

05:01Including trade with China.

05:04You can see the relations with Saudi Arabia.

05:07So, have these things had an impact?

05:12Our incapability to handle our economy.

05:19Or the delay in payments.

05:22Because of this, they are skeptical.

05:26So, certainly.

05:27If you talk about Saudi Arabia.

05:29Some time ago, in the World Economic Forum,

05:32their finance minister said that we are taxing our people.

05:36You should do it too.

05:37And there is a consensus.

05:39And China included.

05:41That Pakistan should stay with the IMF program.

05:44These are the statements of Chinese officials.

05:46That's why I am quoting.

05:47That's why I am absolutely sure.

05:49And I think I have been the only person consistently saying

05:52that negotiate out the IMF.

05:54Put your best foot forward.

05:56This means that put your best team forward.

05:58The IMF is going to take the 24th program in Pakistan.

06:03The extended fund facility in the 23rd program.

06:07One has been completed in life.

06:09So, it is wrong to say that we have gone to the IMF 24 times.

06:12That is not correct, Ashfaq.

06:13Because if one of the longer-term facilities has been completed.

06:17And Ashfaq, I know this because it was a 13-16 facility.

06:21And I had anchored that facility in the core team for Pakistan.

06:25And I again keep telling the countries that we made a professional setup.

06:29There was a lot of leverage.

06:31We had professional support in the energy sector.

06:33Okay, tell me one thing.

06:34Doctor, one thing is that it is obvious that he has the right to do the IMF on this matter.

06:41But Pakistan will have to take steps on its own.

06:44Our seriousness.

06:45You have given a lot of suggestions about energy.

06:48And I think that when the country is stuck in the swamp of debt.

06:52Children are stuck in debt.

06:53We have to pay the debt.

06:55And if we are facing financial problems.

06:57Then our expenditures should also be in that regard.

07:00What is our realization?

07:02And this thing is also seen in other countries.

07:04Because earlier you used to control something.

07:06Now any news is published in English newspapers, Urdu newspapers, websites.

07:11I will give an example.

07:12Last year, the Punjab government made a decision.

07:15Which was the setup of Punjab's Nigra.

07:17They said that we have to spend two and a half billion rupees.

07:19This is our assistant commissioner.

07:21This is our deputy commissioner.

07:23These cars will come for him.

07:25Okay.

07:26They had done that for double cabin cars.

07:30That matter went to the High Court.

07:32That stopped.

07:33Now with the permission of the Sindh government.

07:35The same decision.

07:36That is, a fund of about two billion rupees was issued.

07:39For 138 double cabin cars.

07:41That yes, our assistant commissioner.

07:43Sahiban will travel in a big car.

07:46He will not travel in a double cabin car.

07:48He cannot fulfill his office duties.

07:51So is there any realization in us?

07:54Should we justify this?

07:55This also went to the court.

07:57So is there anyone?

07:58How is our economy?

07:59And what are we doing?

08:01So Mr. Ashfaq, you have made a very important point.

08:04I always said that the budget should not be approached from the taxation side.

08:08The budget should be approached from the expenditure side.

08:11Current expenditure.

08:12If I take out the debt, which is the debt payment.

08:15In which there are salaries, pensions, running of the civil government.

08:18All this comes.

08:19If you look at it, there is an increase of 24%.

08:22You are right.

08:23This 24% increase should not have been done.

08:26I think it should have been curtailed here.

08:28Our developmental budget.

08:30It was spent 7.75 last year.

08:33This year it was kept at 1400 rupees.

08:35Initially.

08:36Even then I said that this is not a tenable position.

08:38Because all this is borrowed money.

08:40Once you pay for the debt.

08:42The 9700-8000.

08:44This is absolutely correct.

08:46If you want to finish, you have to give me 30 seconds.

08:49Because you did a very good opening.

08:51Yes, yes, please.

08:53Sir, you have 30 seconds.

08:55In the opening, you said that why does Pakistan go?

08:58If Pakistan does not want to go back to the IMF.

09:01So here is the formula.

09:02Create functioning markets.

09:04Do global trade integration.

09:07Do divestment.

09:09Do data mining.

09:11Deregulate Pakistan.

09:13Devolve.

09:14The subjects that have to go down.

09:16Create a communication strategy.

09:18And bring your team to do all this.

What are the Real Reasons For The Delay in the Approval of IMF Program | Dr Khaqan Najeeb Analysis

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