I was shocked to read a status message of a fellow bloggers on facebook. “IMF approves another $3.2Billion for #Pakistan bringing the total to $11.3Billion > with all the relief we are still no better > I think we are Royally Screwed for life“, it reads. Another fellow claims it as Zardair’s fault! This was a shock for me as the gentleman is very well educated, an online activist and very much familiar about economic and social issues.
Many of us get in to trap of slogans of political leaders who try to sell every thing for sake of some public support, some times we get confused and ignore the facts. Some of these leaders are disillusioned or unaware of economic and social parameters and others dishonestly exploit the public which is not supposed to be expert on every subject, the illiteracy adds the confusion. The simple rule, if you can not fight them, confuse them! The so called ‘leader’ earns popularity by cheating people, ‘intellectually’.
Let us began with basics. National economy is not different from household budget. We are a global village and trade in international community as a town or village do. If income of a household is Rs. 100 but spending is 150, then the family has to borrow to meet additional spending in shape of credit card or bank loan or even credit from community. The alternate is to increase the household income by working hard or producing more and spending less.
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Russia is the largest borrower from the International Monetary Fund (IMF). The initial objective and promises by IMF were to quickly bail Russia out of an economic crises, and throw it back on track. Today Russia’s debts to the IMF are so big that the only way to ensure repayment is to keep borrowing more. This summer alone $4.5bn have been borrowed entirely for minimum repayment of previous IMF loans.