Today I found sometimes to review Pakistan's history of borrowing from IMF. While going through the data I've found some interesting facts which I thought I should be sharing with my contacts base on social media. I believe such a work on historical data is important to work on and share with other because this how a common Pakistan citizen can fight power mafias who have been ruling this country and have full contribution in destroying it economically by compromising economic empowerment but they still have the audacity to come on TV channels in talk shows and do the circus of press conferences to misguide the innocent people.
Pakistan’s story of knocking IMF’s door began on 8 December 1958 when Gen. Ayub first went to IMF. Gen. Ayub's finance team got SDR 25m approved under standby agreement but the money was never withdrawn. However, after expiry of earlier agreement and commitment made by IMF the Gen. Ayub's team super talented economics gurus went to IMF twice subsequently in 1965 and 1968 and this time they and withdrew SDR 112 million against the same agreed amount by IMF. Thus officially from here Pakistan’s serious intimate relationship with IMF kick started.
Zulfiqar Ali Bhutto once the blue-eyed child of dictators became the ruler of the country by replacing Ayub and this is what known in modern history as the advent of the democracy and end to the military rules. After that successful receipt of funds from IMF during Gen. Ayub’s time Pakistan was again on IMF’s doorstep. Thus, on May 18, 1972 Pak knocked IMF's door once again but this time under the dynamic and charismatic leadership of Zulfiqar Ali Bhutto. Bhutto liked IMF very much that he was being almost unstoppable during his tenure Pakistan went in IMF programs for 4 times consecutively from 1972 to 1978. During Mr. ZAB's time Pakistan withdrew about SDR 314 million against agreed SDR 330 million.
Mr. ZAB was succeeded by Gen. Zia Ul Haq. Despite all the problems with Bhutto one thing that Gen. Zia liked the most about Mr. Bhutto was his infatuation with IMF. Gen. Zia kept the stone rolling as From 1980 to 1981 under his pure Islamic regime Pakistan went to IMF twice and successfully secured loans of SDR 2.187 billion but only $1.079 billion were used. Zia liked the loans but he probably didn’t like interest payments as these we hear Moulana Khadim Hussain Rizvi’s economic vision of shooting a Ghauri to lenders in return of the loans.
Gen. Zia died but his legacy didn’t, although his dead paved the way for the democracy to return to the country again. With the return of the democracy we found two gems of our times i.e Nawaz Sharif and Benazir Bhutto. Albeit, Nawaz Sharif is generally perceived as stooge of the Gen. Zia as Mr. Bhutto was stooge of Gen. Sikandar and Gen. Ayub but the political struggle of two gentlemen helped them in reshaping themselves as democratic leaders, especially Nawaz Sharif whose political struggle was hovering around switching parties, betting on right horses, use of money in buying the journalists and the politicians and finally forming his own party. This transformed him into a mainstream political leader.
During the Benazir-Nawaz model of democracy from 1988 to 1997 Pakistan went to IMF programs about 8 times under the experienced, dynamic and champion governments of PPP and PMLN. During this period Pakistan withdrew about SDR 1.64 billion. Out of these 8 programs five times it was PPP's government who did the wonder while three times it was PMLN ruling the country.
In 1999 Gen. Musharraf toppled the government of Mr. Nawaz Sharif but even Gen. Musharraf did not hesitate in reaching out to the IMF. Musharraf government secured SDR 1.33 billion in two attempts not to mention in 9 years yet on massively lower interest rates.
In 2008 PPP won the elections and post elections PPP-PMLN formed the government as coalition partners. Together both parties showed determination for the impeachment of the President Musharraf. Gen. Musharraf resigned to avoid impeachment and this allowed democracy to prosper again. PPP after sending Musharraf home did its most favorite past time again. They went to IMF otherwise it would have bother Mr. Bhutto and Ms. Bhutto’s soul in heaven. PPP secured highest ever loan sizing to SDR 4.94 billion.
In 2013 PMLN registered a landslide victory and formed government in center as well as in Punjab and Baluchistan. Once the government was formed the first thing which PMLN did was going into an IMF program. As well as know Mr. Sartaj Aziz and Mr. Ishaq Dar have no match when it comes to secure loans from any avenue IMF probably was one of the easiest lender to negotiate borrowing. Thus, in 2013 Pakistan under the leadership of Mr. Nawaz Sharif secured SDR 4.399 billion loan.
All in all till today Pakistan has borrowed SDR 13.79 billion from IMF out of which 47% loans were secured by PPP followed by PPP with 36% while military dictatorship contributed merely by 18%.
When it comes to secure loans from IMF, PPP is found far superior than even PMLN forget military rules. From their founder to their current leadership PPP 10 times successfully borrowed from IMF followed by military dictators who went to IMF about 7 times while PMLN although went in IMF programs only four times but in these four times they secured a bigger number of loans.
The graph below indicates that the PMLN and PPP left the dictators far behind in receiving loans from IMF. As of today, Pakistan secured total financing of SDR 13.80 billion out of which SDR 6.42 billion was done by PPP alone with makes 47% of overall financing followed by PMLN with SDR 4.86 billion which makes 35% of the overall financing while military dictators from Gen. Ayub to Gen. Musharraf all together showed an poor performance as their share with SDR 2.52 stands merely 2.52 billion. If we compare number based on democracy vs dictatorship basis then we learn that during the democracy Pakistan received 82% of the loans while military dictators merely 18% contribution look too tiny in the business.
I hope you enjoyed read. Please don't forget to share your feedback. Your opinions are welcome.
Muhammad Sarfaraz Abbasi is a Pakistani financial services industry professional. He has been associated Atlas Group, Summit Capital Markets and some other renowned institutions as an Investment analyst; currently he serves National Investment Trust Limited (NIT) which is Pakistan’s largest state owned Asset Management Company. Sarfaraz is Mutual Funds, Private Equity and Venture Capital enthusiast can be reached via twitter @ImSarfrazAbbasi
Pakistan’s story of knocking IMF’s door began on 8 December 1958 when Gen. Ayub first went to IMF. Gen. Ayub's finance team got SDR 25m approved under standby agreement but the money was never withdrawn. However, after expiry of earlier agreement and commitment made by IMF the Gen. Ayub's team super talented economics gurus went to IMF twice subsequently in 1965 and 1968 and this time they and withdrew SDR 112 million against the same agreed amount by IMF. Thus officially from here Pakistan’s serious intimate relationship with IMF kick started.
Zulfiqar Ali Bhutto once the blue-eyed child of dictators became the ruler of the country by replacing Ayub and this is what known in modern history as the advent of the democracy and end to the military rules. After that successful receipt of funds from IMF during Gen. Ayub’s time Pakistan was again on IMF’s doorstep. Thus, on May 18, 1972 Pak knocked IMF's door once again but this time under the dynamic and charismatic leadership of Zulfiqar Ali Bhutto. Bhutto liked IMF very much that he was being almost unstoppable during his tenure Pakistan went in IMF programs for 4 times consecutively from 1972 to 1978. During Mr. ZAB's time Pakistan withdrew about SDR 314 million against agreed SDR 330 million.
Mr. ZAB was succeeded by Gen. Zia Ul Haq. Despite all the problems with Bhutto one thing that Gen. Zia liked the most about Mr. Bhutto was his infatuation with IMF. Gen. Zia kept the stone rolling as From 1980 to 1981 under his pure Islamic regime Pakistan went to IMF twice and successfully secured loans of SDR 2.187 billion but only $1.079 billion were used. Zia liked the loans but he probably didn’t like interest payments as these we hear Moulana Khadim Hussain Rizvi’s economic vision of shooting a Ghauri to lenders in return of the loans.
Gen. Zia died but his legacy didn’t, although his dead paved the way for the democracy to return to the country again. With the return of the democracy we found two gems of our times i.e Nawaz Sharif and Benazir Bhutto. Albeit, Nawaz Sharif is generally perceived as stooge of the Gen. Zia as Mr. Bhutto was stooge of Gen. Sikandar and Gen. Ayub but the political struggle of two gentlemen helped them in reshaping themselves as democratic leaders, especially Nawaz Sharif whose political struggle was hovering around switching parties, betting on right horses, use of money in buying the journalists and the politicians and finally forming his own party. This transformed him into a mainstream political leader.
During the Benazir-Nawaz model of democracy from 1988 to 1997 Pakistan went to IMF programs about 8 times under the experienced, dynamic and champion governments of PPP and PMLN. During this period Pakistan withdrew about SDR 1.64 billion. Out of these 8 programs five times it was PPP's government who did the wonder while three times it was PMLN ruling the country.
In 1999 Gen. Musharraf toppled the government of Mr. Nawaz Sharif but even Gen. Musharraf did not hesitate in reaching out to the IMF. Musharraf government secured SDR 1.33 billion in two attempts not to mention in 9 years yet on massively lower interest rates.
In 2008 PPP won the elections and post elections PPP-PMLN formed the government as coalition partners. Together both parties showed determination for the impeachment of the President Musharraf. Gen. Musharraf resigned to avoid impeachment and this allowed democracy to prosper again. PPP after sending Musharraf home did its most favorite past time again. They went to IMF otherwise it would have bother Mr. Bhutto and Ms. Bhutto’s soul in heaven. PPP secured highest ever loan sizing to SDR 4.94 billion.
In 2013 PMLN registered a landslide victory and formed government in center as well as in Punjab and Baluchistan. Once the government was formed the first thing which PMLN did was going into an IMF program. As well as know Mr. Sartaj Aziz and Mr. Ishaq Dar have no match when it comes to secure loans from any avenue IMF probably was one of the easiest lender to negotiate borrowing. Thus, in 2013 Pakistan under the leadership of Mr. Nawaz Sharif secured SDR 4.399 billion loan.
All in all till today Pakistan has borrowed SDR 13.79 billion from IMF out of which 47% loans were secured by PPP followed by PPP with 36% while military dictatorship contributed merely by 18%.
When it comes to secure loans from IMF, PPP is found far superior than even PMLN forget military rules. From their founder to their current leadership PPP 10 times successfully borrowed from IMF followed by military dictators who went to IMF about 7 times while PMLN although went in IMF programs only four times but in these four times they secured a bigger number of loans.
The graph below indicates that the PMLN and PPP left the dictators far behind in receiving loans from IMF. As of today, Pakistan secured total financing of SDR 13.80 billion out of which SDR 6.42 billion was done by PPP alone with makes 47% of overall financing followed by PMLN with SDR 4.86 billion which makes 35% of the overall financing while military dictators from Gen. Ayub to Gen. Musharraf all together showed an poor performance as their share with SDR 2.52 stands merely 2.52 billion. If we compare number based on democracy vs dictatorship basis then we learn that during the democracy Pakistan received 82% of the loans while military dictators merely 18% contribution look too tiny in the business.
Muhammad Sarfaraz Abbasi is a Pakistani financial services industry professional. He has been associated Atlas Group, Summit Capital Markets and some other renowned institutions as an Investment analyst; currently he serves National Investment Trust Limited (NIT) which is Pakistan’s largest state owned Asset Management Company. Sarfaraz is Mutual Funds, Private Equity and Venture Capital enthusiast can be reached via twitter @ImSarfrazAbbasi
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