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Print

Miftah swings into action on stalled IMF programme

  • Says visit to Washington is to put back on track IMF programme that PTI and Imran Khan derailed
Updated 22 Apr, 2022

ISLAMABAD: Newly-appointed Finance Minister Miftah Ismail said on Thursday that he was leaving for Washington, where he was expected to meet International Monetary Fund (IMF) officials for the revival of a loan facility that was stalled following the premature end of the Imran Khan government earlier this month.

Ismail, who has replaced Shaukat Tarin in the role of the country’s finance czar in the new coalition setup, tweeted before leaving for Washington that the purpose of the visit was to “put back on track our IMF programme that PTI and IK (Imran Khan) derailed, thus endangering our economy”.

He added that he would travel to London on the way, where he would meet PML-N supremo Nawaz Sharif.

On Wednesday, Ismail told media persons during a press conference in Islamabad that his priority was to secure one tranche of $1bn from the IMF and prepare for the coming budget and not to club two quarterly reviews.

He further said he was expecting to meet the IMF managing director, chief executive officer of the World Bank, executive directors of the G-7 nations, ministers of Turkey, Saudi Arabia and China and the IMF mission chief to Pakistan.

IMF’s conditions: In the same press briefing, Ismail revealed that the IMF wanted Pakistan to do away with subsidies extended by the previous government, including those on fuel prices and power tariffs — two relief measures that former prime minister Imran Khan had announced right before the filing of a no-trust motion against him. The move had invited criticism with many describing it as going against Pakistan’s commitments to the IMF for the $6 billion Extended Fund Facility.

Pakistan to 'continue close engagement' with IMF, World Bank: Miftah Ismail

The IMF had set a series of prior conditions involving steep fiscal adjustment close to Rs1.3 trillion, Ismail said, adding the IMF wanted an increase in fuel prices to breakeven and taxes restored, amnesty scheme discontinued for industries, circular debt reduced, power rates raised and fiscal savings ensured in order to completely reverse the PTI government’s February 28 relief package.

The previous government had a commitment to have a primary balance of Rs25bn which was now in deficit at Rs1.3 trillion. “We have heard their (IMF) position but have not made any commitment yet,” Ismail said.

The PML-N led coalition government, which had severely criticised the previous Imran-led government for first failing to control fuel prices in the country and later for “derailing” the IMF programme through fuel and electricity subsidies, is yet to reverse the measure of reducing petrol prices with Prime Minister Shehbaz Sharif last week rejecting the Oil and Gas Regulatory Authority’s (Ogra) proposal in this regard.

Assuring that no burden would be passed on to the people in the process to meet the IMF’s conditions, Ismail added, “But something would have to be done because the IMF programme is inevitable.”

The government would ensure fiscal discipline and tighten its own belt to restore the IMF programme and no extra burden would be put on the people, he said.

Ismail further said the government would ensure a “gentle landing” of the unwinding of the PTI’s “unscrupulous” relief package that had put the country’s economic stability at stake.

The minister also hinted at doing away with tax amnesty for industries at the outset and added that the IMF’s greater focus was on ending fuel subsidy because it was creating a fiscal hole while power tariff could somehow be delayed because its direct bearing on the budget was not immediate.

He said about Rs100bn saving could be made by cutting the development budget to Rs600bn instead of Rs900bn, which might not be spent in any case by the ministries.

Responding to a question on the IMF’s demand for more taxes, he said he had explained nothing could be achieved in taxes in these two months.

Comments

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Ayesha Emad Khan Apr 22, 2022 10:24am
Alas! the neck-grip is narrowing to the last breadth of every Pakistani. Soon our national outfit would be gone and the hideous skin we are actually wearing would be visible to the world. The long-held claims of corruption, though never proven, with underlying persistent challenges of increasing circular debt, worsening of balance of payments, trade balance deficit, inability to continue public service / development programmes, increasing tax burden and disrupted fiscal / monetary regimes are all questioning the premise that is yet to be proven. A nation and its leaders, be love or unloved, if do not mend their ways, they would be compelled to compromise beyond belief. Time to put the ailing sectors to check without bias. IMF’s advise should not be dissuaded to protect the privileged any further. However, there could be a decent negotiation set out to make a win-win situation for both ends; without passing on any further burden to the blue-collar or the white-collar class.
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