Fi­nance Min­istry op­ti­mistic of suc­cess­ful con­duct of 11th re­view of IMF Pro­gramme

Pakistan Observer - - ECONOMY WATCH -

MIAN AR­SHAD IS­LAM­ABAD—The Fi­nance Min­istry is op­ti­mal op­ti­mistic for suc­cess­ful con­clu­sion of the on­go­ing talks for 11th re­view of ex­tended funds fa­cil­ity (EFF) with the In­ter­na­tional Mon­e­tary Fund (IMF). The talks kicked off in Dubai from May 02 and will con­clude to­day (Wed­nes­day). Sec­re­tary Fi­nance Dr. Waqar Ma­sood along with Chair­man FBR Nisar Muham­mad Khan, Gover­nor State Bank Ashraf Wathra is lead­ing Pak­istani del­e­ga­tion in tech­ni­cal level. How­ever, Fi­nance Min­istry is not clear whether Fi­nance Min­is­ter Ishaq Dar will join the pol­icy level phase of talks with IMF or not. A well placed of­fi­cial source at Fi­nance Min­istry told Pak­istan Ob­server here on Mon­day that Fi­nance Min­is­ter Ishaq Dar was neck bound busy here in hours’ long de­lib­er­a­tions with stake­hold­ers on Panama Leaks phase one and two as well as up­com­ing Dubai Leaks.

“There­fore, it is quite cer­tain that Fi­nance Min­is­ter will join the talks with IMF on fi­nal stage only for few hours and his pos­si­ble visit to Dubai will not be more than one day and per­haps only for sign­ing the agree­ment as well as for hold­ing press con­fer­ence with rep­re­sen­ta­tive of IMF over suc­cess­ful con­clu­sion of talks” the source added. How­ever, it has been nor­mal prac­tice in the past that Fi­nance Min­is­ter used to an­nounce the suc­cess­ful con­clu­sion of talks with IMF over EFF re­view in a press con­fer­ence with IMF rep­re­sen­ta­tive ei­ther in Dubai or in Is­lam­abad in the past. The source said that ma­jor fo­cus of the gov­ern­ment in cur­rent round of talks with IMF was on fi­nal­iza­tion of fed­eral and pro­vin­cial bud­gets for the fis­cal year 2016-17. In this re­gard, Fi­nance Min­istry had shared bud­get strat­egy pa­per for 2016-17 with the IMF.

The Fi­nance Min­istry is at ease with most of the bench­marks and per­for­mance indi­ca­tors, ex­cept for the set­back to the pri­vati­sa­tion agenda that has been a ma­jor con­cern for the IMF. The govt also needs to col­lect Rs 760bn rev­enue in the fi­nal two months of the fis­cal year 2015-16 to achieve the rev­enue col­lec­tion tar­get. “Fur­ther­more, en­hanced vol­ume of for­eign ex­change re­serves, con­fi­dence re­posed by in­ter­na­tional in­vest­ment or­ga­ni­za­tions in eco­nomic pos­i­tive eco­nomic indi­ca­tors as well as keen in­ter­ests shown by Chi­nese and other coun­tries’ in­vestors in re­cent in­vest­ment con­fer­ences may be pos­si­ble sup­port­ive tools for Pak­istani team lead by Fi­nance Min­is­ter Ishaq Dar in the talks with IMF in Dubai” the source added.

“With the suc­cess­ful con­duct of this re­view, Pak­istan will be in a po­si­tion to en­sure the in­ter­na­tional fi­nan­cial in­sti­tu­tions about the im­prove­ment in eco­nomic pro­file which will def­i­nitely pave way for flux of in­ter­na­tional in­vest­ment in the coun­try” the source ob­served. The Fi­nance Min­istry is of the view that Pak­istan suc­cess­fully con­ducted record ten reviews with the IMF though in the past gov­ern­ments could not go be­yond two reviews and it be­came pos­si­ble just be­cause of the hec­tic re­forms process that the gov­ern­ment had re­li­giously im­ple­mented, yield­ing pos­i­tive re­sults.

Thus the 11th re­view with full con­fi­dence as Pak­istan had ful­filled all its obli­ga­tions and now boasted of a sta­ble econ­omy. Pak­istan ’s econ­omy was held in es­teem by in­ter­na­tional rat­ing agen­cies, and in fact Moody’s had al­ready en­hanced Pak­istan ’s eco­nomic out­look from sta­ble to pos­i­tive as well as Pak­istan ’s con­tin­ued strug­gle for elim­i­na­tion of ter­ror­ism and said peace and se­cu­rity would ul­ti­mately ben­e­fit the econ­omy.

An Ex­tended Fund Fa­cil­ity with IMF pro­vides as­sis­tance in sup­port of com­pre­hen­sive pro­grams that in­clude poli­cies of the scope and char­ac­ter re­quired to cor­rect struc­tural im­bal­ances over an ex­tended pe­riod. It has a com­par­a­tively longer re­pay­ment pe­riod of 4½–10 years, with re­pay­ments in twelve equal semi-an­nual in­stal­ments. Pak­istan en­tered into an ex­tended fund fa­cil­ity (EFF) pro­gram with IMF on Septem­ber 4, 2013. It is a 36month ex­tended ar­range­ment un­der the Ex­tended Fund Fa­cil­ity (EFF) for $6.64 bil­lion, 425 per­cent of quota). First tranche $544.5 mil­lion, 34.8 per­cent of quota) be­came avail­able on Septem­ber 6, 2013, and the re­main­der would be evenly phased there­after sub­ject to quar­terly reviews.

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