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Originally Posted by Durrani Abid
Ok. All comes to how healthy are your foreign reserves.
As facts exist,foreign reserves of Pakistan are steeply depleting and we are in dire need of dollars as we have to foot the import bills specially for oil. Now coming to measures:One is to export more,second is remittances.
Current conditions of the BOT-balance of trade is no more a secret it's alredy shows deficit(Current Account deficit almost $3394 as per last economic servey of Pakistan) and remittances are not strong enough to improve our foreign reserves,FDI can help but in fiscal year 2011-2012 it is down by a mammoth 50% for many and various reasons.
Considering such nightmare,what is the option we are left with? Should we go to IMF again with begging bowl.Pleas comment.
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I have my two reasearch Publications about the impact of FDI on Economic growth and Foreign Aid on the economic growth of PAkistan. My final and concluding result was that FDI will promote growth when it is assissted by Human capital and political stability. As you have mentioned that there comes a mammoth fall in FDI it's because of the political instabilty prevailing in the country and corruption. Moreover it is not met by human capital. Check the economy of Denmark whose major source of the government expenditures are foreign remittances as they have equipped the population with Human capital.
IMF are the institutions that issues loan on the basis of conditionalities and in my second reearch article my final conclusion was that tied aid instead to betteroff will worse off the recepient country i the present scenario Karry lougar bill is the example,, it was issued with conditionalities. Paki govt was not allowed to invest in the developmental sector like for energy purpose and for developing human capital and education. I suggest you to read the book Confession in Economic Hitman..