IMF considers Pak economic policymakers ‘cheaters and liars’: Ex-officialApril 26th, 2011 - 5:03 pm ICT by ANI
Islamabad, April 26(ANI): The International Monetary Fund considers the economic policymakers of Pakistan to be ‘cheaters and liars’, the country’s former representative in the IMF board, Dr Ehtisham Ahmad, has said.
Addressing a seminar on ‘Urgency of Tax Reforms-The challenge to the Macroeconomics Situation and Development’ organised by the Institute of Development Economics and Alternatives (IDEAs), Dr Ahmad revealed that a last moment favour by the White House helped Pakistan gain the 11.3-billion-dollar Stand-by Arrangement (SBA) in 2008 with the IMF.
The IMF has had a very low opinion about Pakistan, which became a reason for initially refusing the bailout programme that was sought to avoid defaults on international payments.
“The White House had to intervene (to secure a programme for Pakistan), as even the friends on the IMF board said that Pakistan’s economic team lied on the promise of levying (the value-added tax),” the Daily Times quoted Dr Ahmad, as saying.
Now, after two and a half years, the IMF considers the economic policymakers ‘cheaters and liars’, the former official added.
Dr Ahmad said that the 2008 programme was approved on Finance Secretary Dr Waqar Masood’s plan, whose key element was that Pakistan would finally address the domestic resources mobilisation issue and generate additional tax revenues equivalent to one per cent of the total national income for consecutive three years.
The IMF wanted Pakistan to enhance the tax to Gross Domestic Product (GDP) ratio to 14 per cent from the lows of 9.0 per cent till 2013, and reduce the budget deficit to three percent of the total size of the economy.
However, the programme was suspended after two and a half years due to the government’s failure in implementing tax reforms.
Dr Ahmad said it would not be easy for Pakistan to have another bailout programme with tainted reputation, adding: “It is now a different IMF, that will seek prior implementation of conditions before agreeing to a new programme.”
“Windows of opportunity are fast closing on Pakistan due to the credibility issue,” said renowned economist Dr Faisal Bari, adding that the government should tax all sectors irrespective of size of revenue to ensure tax equity. (ANI)
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Tags: bailout, budget deficit, cheaters and liars, development economics, domestic resources, economic team, ehtisham ahmad, finance secretary, gdp ratio, gross domestic product, imf board, international monetary fund, international payments, last moment, lows, masood, tax reforms, tax revenues, two and a half years, waqar