SUMMARY of the Article “IMF’s Concern,” Dawn, November 17th, 2024
The article highlights the IMF’s recent unscheduled discussions with Pakistani authorities on the ongoing $7 billion loan program, which concluded without the usual end-of-mission statement, leaving the public uncertain about the outcomes. The IMF expressed significant concerns over delays in securing $2.5 billion in foreign loans, including a $1.2 billion Saudi oil facility, and a revenue shortfall of Rs190 billion in tax collection for the July-October period. Additionally, the slow progress on the National Fiscal Pact and delays in privatizing state-owned enterprises (SOEs) have raised alarms, as provinces have yet to align their farm and property tax rates with federal standards. These lapses indicate that the government is struggling to meet several structural benchmarks crucial for economic stability. Despite having time before the formal review in February or March, these failures threaten Pakistan’s access to the next $1 billion tranche and erode market confidence. The IMF’s insistence on strict compliance, exemplified by its decision to send an early mission, underscores its skepticism about Pakistan’s commitment to reforms. The article also critiques the government for yielding to influential lobbies like retailers and real estate businesses, which compromises critical economic decisions. While the prime minister and finance team have pledged to make this the last IMF bailout, their rhetoric appears hollow in the face of the current economic mismanagement.
Easy/Short SUMMARY:
The article discusses the IMF’s concerns about Pakistan’s failure to meet key economic targets in its $7 billion loan program. Delays in securing $2.5 billion in foreign loans, a tax shortfall of Rs190 billion, and slow progress on reforms like tax alignment and privatization have alarmed the IMF. These issues may affect Pakistan’s ability to access the next $1 billion tranche. Despite government promises to end reliance on IMF bailouts, weak reforms and political compromises with powerful groups undermine progress.
SOLUTIONS of The Problem:
Timely Materialization of Foreign Loans
Pakistan must expedite agreements with foreign lenders, including the Saudi oil facility, and maintain diplomatic efforts to secure timely disbursements.
Enhanced Tax Collection Mechanisms
Strengthen the Federal Board of Revenue (FBR) by introducing digital systems for efficient tax collection and reducing evasion through stricter audits and penalties.
Reform Provincial Tax Structures
Align provincial farm and property taxes with federal tax policies to ensure uniformity and eliminate loopholes in the tax system.
Privatization of SOEs
Accelerate the privatization of state-owned enterprises to improve efficiency and reduce fiscal burdens, ensuring transparent bidding processes to attract investors.
Public Financial Accountability
Increase transparency in government expenditures and implement performance-based budgeting to rebuild trust among international lenders.
Curtailing Lobby Influence
Enforce stricter regulations to limit the influence of powerful lobbies, ensuring economic decisions are made in the national interest.
Develop a Comprehensive Economic Plan
Create a detailed roadmap for structural reforms, including deadlines and accountability measures, to achieve long-term economic stability.
Foster Market Confidence
Engage with the private sector and international investors to restore confidence through consistent and transparent policies.
Expand Revenue Streams
Diversify revenue sources by encouraging industries like IT and agriculture exports, reducing reliance on external loans.
Strengthen IMF Relations
Maintain close collaboration with the IMF by fulfilling program requirements to secure future support and boost credibility.
IMPORTANT Facts and Figures Given in the Article:
- IMF raised concerns over delays in securing $2.5 billion in foreign loans, including a $1.2 billion Saudi oil facility.
- Rs190 billion shortfall in tax collection during July-October 2024.
- Provinces have yet to align farm and property tax rates with the federal tax regime.
- The first formal review of the bailout is expected in February or March 2025.
- Pakistan’s credibility on reforms is low due to a history of non-compliance.
MCQs from the Article:
1. What is the total amount of foreign loans delayed, as mentioned in the article?
A. $1.2 billion
B. $7 billion
C. $2.5 billion
D. $5 billion
2. Which sector’s tax rates are yet to align with the federal tax regime?
A. Farm and property taxes
B. Corporate taxes
C. Import duties
D. Sales taxes
3. When is the formal biannual review of the IMF bailout expected?
A. December 2024
B. February or March 2025
C. January 2025
D. April 2025
4. What was the tax collection shortfall for the July-October 2024 period?
A. Rs250 billion
B. Rs190 billion
C. Rs120 billion
D. Rs300 billion
5. Which country is linked to the $1.2 billion oil facility?
A. UAE
B. Saudi Arabia
C. China
D. Qatar
VOCABULARY:
- Deviation (انحراف): A divergence from an expected standard or path.
- Materialization (عملی مظہر): The process of becoming real or actual.
- Fiscal (مالی): Relating to government revenue, especially taxes.
- Privatization (نجکاری): Transfer of ownership from the public to the private sector.
- Disbursement (ادائیگی): The act of paying out money, especially from a fund.
- Align (ہم آہنگ کرنا): Arrange in a straight line or bring into alignment.
- Skepticism (شکوک): Doubt as to the truth of something.
- Compliance (توافق): The act of following rules or standards.
- Erosion (کمی): Gradual reduction or destruction.
- Credibility (ساکھ): The quality of being trusted and believed in.
📢 Attention Please!
We appreciate your commitment to acquiring knowledge through our summaries. Please be reminded not to remove the attribution label affixed to this article. It is crucial to acknowledge the source and the effort invested in creating this summary. We discourage any unauthorized distribution without proper credit. Thank you for your understanding and cooperation. 🔍
⚡ Explore More Summaries, Solutions, and Vocabulary Meanings!
💡 Join our WhatsApp Channel for timely and comprehensive summaries of the latest articles, along with well-crafted solutions and helpful vocabulary meanings. Click the link below to join now:
🔗 Dawn Article Summaries
WhatsApp Channel Link
https://whatsapp.com/channel/0029Va7tT3o35fLnJeFbpS2y
dawn.com
IMF’s concern
Editorial
ON Friday, the IMF team wrapped up its weeklong unscheduled talks on the Fund’s ongoing $7bn programme with the Pakistani authorities without making a customary end-of-mission statement, thus leaving most people in the dark about the outcome of the discussions. Some media reports have conjectured that the lender might comment on its findings soon. However, although we do not have all the details, it is clear from the information provided to journalists during the course of the talks that the Fund is seriously “concerned” over delays in the materialisation of foreign loans of $2.5bn, including a Saudi oil facility of $1.2bn, and the shortfall of Rs190bn in the tax collection target for the July-October period. The slow progress on the National Fiscal Pact, signed by the provinces and the centre, and delays in the privatisation of SOEs seem to have emerged as other areas of concern for the Fund, as the provinces have yet to align their farm and property tax rates with the federal tax regime.
It looks like the government is falling short of meeting several critical structural benchmark targets. Nonetheless, it still has some time to meet or, at least, move closer to, the targets as the first ‘formal biannual review’ of the bailout loan is expected to take place towards the end of February or early March. Dependent on a successful programme performance review is the disbursement of the next $1bn tranche and, more critically, the market’s confidence in the economy. The fact that fiscal deviations and delays in implementing other targets had alarmed the lender, compelling it to dispatch an early mission to protect the programme from derailment, indicates that the Fund would like to keep Islamabad on a tight leash. In spite of the strict implementation of the last short-term IMF SBA loan, Pakistan’s track record has not inspired much confidence in the country’s commitment to undertaking reforms. As they say, ‘once bitten, twice shy’ — multilateral and bilateral lenders are no longer in a mood to ignore the dilly-dallying on critical targets. The prime minister and his finance team have repeatedly pledged to make the current IMF bailout the country’s last. But that appears to be more of political rhetoric than a plan, given the way they have allowed powerful lobbies — retailers, real estate businesses and others — to influence the government’s economic decisions.
Published in Dawn, November 17th, 2024
Current Affairs 2024 MCQs by CSS MCQs
CURRENT AFFAIRS MCQs CSS PAST PAPER QUIZZES
| 2024JulyJuneMayAprMarFebJan 2023DecNovOctSepAugJulyJuneMayAprilMarFebJan 2022DecNovOctSepAugJulyJuneMayAprilMarFebJan 2021DecNovOctSepAugJulJunMayAprilMarFebJan 2020DecNovOctSepAugJulJunMayAprilMarFebJan PPSC, FPSC Past Papers Sub Inspector MCQs PaperHere, you can seek Current Affairs MCQs for the years 2021, 2022, and 2023. Covering issues of Pakistan including political, economic, and social affairs, as well as the country's relations with neighbours and global entities. Current Affairs MCQs CSS Past Paper QuizzesDomestic Affairs MCQsOur repository offers MCQs covering Pakistan’s Domestic Affairs such as Political, Economic, and Social Issues. External Affairs MCQsMCQs of Pakistan’s External Affairs cover Pakistan’s relations with its Neighbors (India, China, Afghanistan, Russia), the Muslim World (Iran, Saudi Arabia, Indonesia, Turkey) and with the United States and with Regional and International Organizations (UN, SAARC, ECO, OIC, WTO, CW). Global Issues Multiple Choice QuestionsWe also have a broad range of Global Issues Multiple Choice Questions. Additionally, you can also Submit an MCQ of Current Affairs. Current Affairs Online QuizIf you are willing to take Current Affairs Online Quiz, Click HERE. MCQs of Current Affairs 2022 & 2023Here, you can seek Current Affairs 2021, 2022 & 2023 MCQs of Pakistan Current issues 2021, 2022 & year 2023. Pakistan Current Affairs sample test and practise questions for job Test. Current Affairs of Pakistan, first in Pakistan, Important issues, current govt etc. Here you will find updated Current affairs of Pakistan Mcqs. Furthermore, there are lots of Global Issues Multiple Choice Questions. You can also Submit MCQ of Current Affairs. If you are willing to take Current Affairs Online Quiz, Click HERE
|
