Tuesday, November 04, 2008

Pakistan in a pickle

China Hand, at the blog China Matters, has an illuminating post about Pakistan's economic predicament. Neither the US, nor China, nor Saudi Arabia is willing to cough up the 4 to 6 billion dollars that Pakistan says they need to get through the next two years. That leaves the IMF (controlled by the US) that would lend the money, but only if Pakistan signs away their soul and anything else the IMF deems of value. It's a lot like borrowing money from Tony Soprano:
Pakistan’s The News, citing an internal document, sets out what it said were extremely tough conditions.

1) a 30 percent cut in the defence budget between 2009 and 2020
2) reduce government pensionable jobs from 350,000 to 120,000
3) a new taxation structure to raise revenues including tax on wheat production and other crops
4) Revenue collection reports/analyses to be submitted each quarter to the IMF down to the provincial level
5) Six IMF directors and two from the World Bank to monitor preparation of the federal budget
But why doesn't the US, China, or Saudi Arabia loan the democratically elected government the cash? Because no one is getting what they want. The US wants more cooperation in fighting the Taliban, including the green light for cross border raids, China wants just the opposite, and Saudi Arabia wants Sharif in power and a cooling down in the tribal areas.

China Hand thinks that it is China and Saudi Arabia with the winning hand, and that is logical. But if Pakistan did try to shift that way, don't be too shocked by another coup.


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