Wednesday, December 29, 2010

IMF extends SBA until September 2011

The International Monetary Fund has agreed to extend the standby agreement (SBA) until September 2011. This implies that the government has exactly nine months to deliver on its promises of the value added tax as well as reducing budget deficits.

Given the lack of consensus on maters that matter in Pakistan, it is a forgone conclusion that these 9 months will be lost. National debate will focus on who really was behind Benazir Bhutto's murder and other issues whose resolution will not deliver shelter, food, or medicine to the millions of the flood affectees whose plight is mentioned now only in foreign newspapers. The Pakistani media has moved on to other juicy stories.

The fact that Pakistan's economy is not supported by efficient taxes is known to experts within and outside of Pakistan. Given the lack of intellect or sense in the political establishment in Pakistan, tax reform will remain a hugely debated yet never resolved issue. The expatriates sending billions back to Pakistan, the American taxpayers and the goodwill of charities based in Europe may continue supporting the near defaulted economy of Pakistan.

cr10384.pdf (application/pdf Object)

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