IMF awards $5 billion bailout loan to Pakistan, again

posted at 6:01 pm on July 6, 2013 by Erika Johnsen

Europeans certainly aren’t the only recipients of economic life-rafts in the form of bailout loans from the International Monetary Fund; Pakistan’s economy is in dire straits and their fiscal house is most definitely not in order, and this week they asked for an received assistance from the IMF in the form of a $5.3 loan package, via the WSJ:

Pakistan and the International Monetary Fund agreed to a long-term bailout loan of at least $5.3 billion that would give breathing room to the country’s struggling economy.

The announcement by Pakistani Finance Minister Ishaq Dar and Jeffrey Franks, the IMF mission chief, was the result of negotiations between Islamabad and an IMF delegation that had been in Pakistan for 15 days.

Pakistan has been a regular client of the IMF for more than two decades. It has entered nearly a dozen loan programs since 1988, but only successfully completed a handful. The country currently owes the IMF just over $6.2 billion.

Mr. Franks acknowledged that Pakistan had failed to comply with the terms of previous programs but said that wasn’t a reason to “turn a country down.”

Riiiight. The track record of countries addicted to expensive public outlays, but promising to clean up their act and reduce their deficits in exchange for a bailout, is somewhat less than robustly successful; and this might help their struggling country along for a bit, but Pakistan has an impressively long rap sheet of systemic problems that they don’t look at all close to actually reforming, via Reuters:

The country has already once averted a balance of payments crisis in 2008 after securing the $11 billion IMF loan package, which was suspended two years ago after economic and reform targets were missed.

Again, chronic gas and electricity shortages, violent crime and a Taliban insurgency have all hampered growth and contributed to falling foreign investment. The $230 billion economy grew 3.6 percent in the last fiscal year, below a target of 4.3 percent and well below growth rates of around 9 percent seen 10 years ago. …

With reserves shrinking by around $500 million a month and many Pakistanis angry over unemployment as well as high food prices and crippling power cuts, Sharif is keen to be seen as decisive and capable of overhauling the economy.

Unemployment is officially at 6.3 percent but is probably much higher.

The new government has already made some steps towards reforms and has set an ambitious deficit target of 6.3 percent of GDP for its 2013/14 although some analysts say it might be hard to meet.

Yes, and I’m sure they’ll meet those deficit targets — just like they did after receiving the previous IMF loan, right?


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Mr. Franks acknowledged that Pakistan had failed to comply with the terms of previous programs but said that wasn’t a reason to “turn a country down.”

Fool me once, shame on you. Fool me twice, shame on me. Fool me a whole bunch of times and it’s clear there’s corruption going on.

rbj on July 6, 2013 at 6:06 PM

I think I’ll change my name to Joe Pakistan then ask how many billion they’ll give me?

Maybe Raoul Pakistan so they’ll think I’m an privileged illegal as well.

Even better, Trayvon Raoul Pakistan so if a court finds what I did is illegal a judge of easy virtue like Nelson will try to blame it all on someone else.

viking01 on July 6, 2013 at 6:30 PM

Riiiight. The track record of countries addicted to expensive public outlays, but promising to clean up their act and reduce their deficits in exchange for a bailout, is somewhat less than robustly successful; and this might help their struggling country along for a bit, but Pakistan has an impressively long rap sheet of systemic problems that they don’t look at all close to actually reforming

Poor Erika, so cynical at such a young age.

RickB on July 6, 2013 at 6:38 PM

These death-to-the-infidel-West Muslim countries are trying so hard to self destruct but the West (Esp, the US taxpayer), whose infidel guts they despise – for Allah’s sake (per Koran)- tries to keep them alive, as if the West was flush with money and had not economic problems of its own to take care of. They seem to know that the sucker infidels of the West will always save them, and we can expect them to keep the sucker money game going.

Chessplayer on July 6, 2013 at 7:13 PM

Jizya, we are paying it.

They won that battle.

They are winning the sharia law battle in all of western europe.

The caliphate has expanded to include all of north africa.

Political correctness and leftist guilt will drag humanity back to the 700s.

jukin3 on July 6, 2013 at 7:17 PM

Mr. Franks acknowledged that Pakistan had failed to comply with the terms of previous programs but said that wasn’t a reason to “turn a country down.”

When it’s not your money any foolishness seems to make sense.

RJL on July 6, 2013 at 7:26 PM

Towelish welfare recipients with the bomb.

Mason on July 6, 2013 at 7:34 PM

Without western money they could radicalize. America and Americans have too much invested in noble Islam to see it fall. Where would Presidential Libraries be funded from? Where will Jeb and Hillary get their “mad money” for the next Presidential run?

BL@KBIRD on July 6, 2013 at 7:45 PM

Ahhh shucks. Just print more. That’s what we do. What? Don’t you have ink over there???

WryTrvllr on July 6, 2013 at 7:59 PM

Unemployment is officially at 6.3 percent but is probably much higher.

Wow, this is exactly the way that our unemployment numbers should be reported.

Theophile on July 6, 2013 at 8:13 PM

The savages will use to oppress and kill Christians, Hindus, Sihks, and Muslims of differing sects. Pakistan should be shunned like a perverted uncle.

pat on July 6, 2013 at 8:39 PM

Only liberals and rinos are dumb enough to repeatedly fund those who either call us an enemy or fund and protect our enemies.

deepdiver on July 6, 2013 at 8:42 PM

IMF U.S. taxpayers award $5 billion bailout loan to Pakistan, again

Dr. ZhivBlago on July 6, 2013 at 8:52 PM

Still cheaper than our decade long, trillion dollar FDI project in the region.

abobo on July 6, 2013 at 11:28 PM

IMF awards $5 billion bailout loan to Pakistan, again

…sure!…we got it!…why not spend it!/

KOOLAID2 on July 7, 2013 at 12:01 AM

Bottom line the pakis have nukes and Islamic terrorists. So, they can bribe just about anyone they chose. Six billion? Chump change. They will get lots more anytime they need it.

rodguy911 on July 7, 2013 at 8:00 AM

These people are really not our friends (rhetoric to the contrary notwithstanding) but I would rather see the IMF do this than the US alone or no one at all. A failed state in Pakistan is a real possibility if there is a financial collapase and that will provide plenty of troubled waters for the Taliban/Al Queda types to fish in. Helping the admittedly ineffective and weak Democratic government avoid collapse is likely better than any of the actual alternatives out there in a nation where loose nukes could readily get in the wrong hands.

KW64 on July 7, 2013 at 11:42 AM

While it is peachy keen that the IMF is handing over another couple of billion to Pakistan, I was just wondering whether there was any history of Pakistan ever paying back any previous IMF loans?

dockywocky on July 7, 2013 at 12:49 PM