Pakistan's fiscal policies a disaster, says daily

Last Updated: Mon, Jan 21, 2013 05:20 hrs

Islamabad, Jan 21 (IANS) Pakistan's fiscal policies have been an "unmitigated disaster" almost from the outset, said a daily, warning that the situation could get even worse.

An editorial in the News International said the International Monetary Fund (IMF) has repeated what it has said with increasing vehemence in the past few months.

" will not write-off or reschedule Pakistan's loan; and if Pakistan wanted any more out of the IMF coffers then it would have to implement 'certain prior actions' and we all know what they are."

The daily said this has been known for years "but it has made little or no difference to the fiscal lassitude that has sleepwalked the current dispensation in what is now a desperate monetary crisis".

"Capital inflow is a trickle and Pakistan floats on a sea of remittances and there is a yawning gap of billions of dollars on the external account. The IMF is of the opinion that Pakistan's currency is overvalued by about five percent...and inflation, which has dropped of late, is set to rebound in the middle of this year," it said.

The daily added: "The fiscal policies of this government have been an unmitigated disaster almost from the outset, and it all may get even worse."

It observed that Pakistan's projections are filtered through rosy political spectacles, whereas the IMF has a more 'unvarnished' view.

Referring to taxation and the energy sector, the daily described them as the 'Terrible Twins' and said that this "really exercise the barely-disguised irritation of the IMF".

It went on to say that with over 70 percent of the national lawmakers either not registered as tax payers or just not paying their taxes even if they are, they make a bad role model for the millions who would have to be strong-armed into paying their dues.

"The IMF is keen to broaden the tax footprint especially into the ultimate no-no - agriculture. Any determined move in that direction by this or any other government will go down like the proverbial lead balloon," it added.

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