Pakistan People's Party (PPP) and Pakistan Muslim League (Nawaz) Wednesday failed to make any progress on economic reforms agenda ahead of critical negotiations with the International Monetary Fund (IMF) on $11.3 billion Stand-By-Arrangement (SBA).
Sources said donors concern was that the government has not implemented even some of the easier conditions agreed under the SBA such as passage of Banking Companies Ordinance, amendment to State Bank of Pakistan Act and submission of satisfactory bankruptcy law to the Parliament as well as to enforce minimum capital requirement for all the banks and remedial procedure in case of non-compliance. The donors are feeling uneasy over non-compliance of criteria and slow moving reforms in the economy leading to rise in high fiscal deficit. The situation on fiscal side, they fear might plunge the country into 2008-like situation forcing it to approach the IMF to avert foreign payment crisis.
The talks between the government and opposition parties are critical in this context and an agreement on economic reform agenda, an official said would have sent a positive signal to the development partners. The IMF mission is visiting Pakistan next week for critical talks with the economic managers for review of Pakistan economy and some concrete outcome on political front on economic reform agenda would have been helpful to bring the SBA programme back on track. An official on condition of anonymity said that it would be difficult to implement even the revised economic plan envisaging reduction in development expenditure and two weekly holidays would not be possible without political consensus, as support of provinces is critical for implementation of measures envisaged.
On the conclusion of third round of talks with the Pakistan Muslim League (N), Finance Minister Dr Abdul Hafeez Sheikh said that both sides are making efforts to develop consensus on economic reforms agenda and would meet again on Monday. The minister said that meeting of the sub-committee to review the petroleum pricing determination formula would be held today (Thursday) to finalise its recommendations. Similarly, he said the issue of gas and electricity load shedding would also be discussed in the next meeting and another meeting with the Chief Secretaries of all the four the provinces would be held to finalise some administrative measures to control inflation.
The discussion was also held on accountability bill and appointment of Chief Election Commissioner (CEC) and proposals would be finalised in the next meeting. Both sides, he said, decided to constitute a one-man judicial commission to probe into the issue of sugar prices.
Ishaq Dar of Pakistan Muslim League (N) said the meeting was given a briefing by the Governor State Bank of Pakistan on the issue of loan write-offs but the information he gave was not complete. He said the governor was given some proposals. He would again brief the meeting of both the political parties in a few days with complete information. Dar said the meeting was given a figure of Rs 281 billion loans written off by the banks since 1971 with total figure of Rs 66 billion loan written off by the public sector banks. "We have asked the governor SBP to also include in the list the loans written off by the public sector banks before being privatised.
About expenditure control, Dar said the Punjab government has completed its exercise in this regard and is ready to brief the government committee led by the finance minister. He said after setting aside core expenditure related to security, the Punjab government would have Rs 30 billion out of which it has already taken measure to save Rs 6 billion and merged over 7 departments.
Dar clarified reports in a section of press that PML-N has not included terrorism in economic reform agenda and said that terrorism is number one priority of his party that is ready to support the government the way it wants to move against this menace.
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