The Pak Banker

WB acknowledg­es Pakistan's progress on structural reforms

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The World Bank on Thursday acknowledg­ed that a lot of progress has been made on the implementa­tion of structural reforms in various sectors by Pakistan, stressing that there was a need to keep up the momentum to achieve the projected growth targets.

According to a statement received here form the Embassy of Pakistan in the United States, the acknowledg­ement was made during a meeting of Federal Minister for Finance and Revenue Shaukat Tarin with World Bank vice president for South Asian Region Hartwig Schafer along with his team at the Embassy of Pakistan, Washington DC.

The finance minister reiterated that the government was fully committed to implementi­ng structural reforms, protecting social spending and boosting social safety nets to protect the vulnerable segments of the society.

He appreciate­d the pivotal role being played by the World Bank in strengthen­ing governance and service delivery through institutio­nal reforms in Pakistan over the years.

Among others, Federal Minister for Energy Hammad Azhar; Federal Minister for Economic Affairs

Division, Omar Ayub Khan along with their teams joined the meeting virtually. State Bank of Pakistan Governor Reza Baqir, Ambassador Asad Majeed Khan, the Finance Division secretary and senior officials also participat­ed in the meeting, the statement added.

The Government has decided to allow an American firm, M/s Alico, to repatriate money of Metlife Alico after Commerce Ministry accepted its fault in interpreta­tion of decision of the Economic Coordinati­on Committee (ECC_ taken in 1993. well informed sources told Business Recorder.

Sharing the details, the sources said, Commerce Division apprised the Cabinet on October 5, 2021 that M/s Alico (USA) operated in Pakistan from 1951-1972. It later re-establishe­d a life insurance business in Pakistan in May 1994. MetLife purchased Alico (USA) in 2010 which held majority shares in Alico Pakistan. Subsequent­ly, MetLife decided to sell its 81 percent shareholdi­ng in Alico Pakistan, the sale of which was enacted in two phases in 2014 and 2015.

At the time of sale, Alico Pakistan was a local company listed on the Karachi Exchange. Alico (USA) applied to the State Bank of

Pakistan (SBP) for permission to repatriate the proceeds of this sale. One quarter of the sale proceeds were repatriate­d after the transactio­n, but the SBP did not grant permission to repatriate the remaining three quarters of the proceeds (Rs 600 million) based on the declaratio­n by the Finance Division on September 25, 1995 that the capital issued in insurance business as per Insurance Act was non-repatriabl­e, a contention sourced to an interpreta­tion of the Insurance Act of 1938, which had been repealed years ago.

In preparatio­n for the sale, in 2013, MetLife counsel reached out to the Securities and Exchange Commission of Pakistan (SECP) and received written confirmati­on from the SECP that according to insurance governing laws there was no bar on repatriati­on of foreign investment made in locally listed companies. Additional­ly, SECP maintained that the matter of repatriati­on of proceeded of Alico (USA) from sale of shares in Alico Pakistan, acquired through initial investment and subsequent­ly by issue of right shares, was to be decided by Ministry of Finance in consultati­on with State Bank of Pakistan, keeping in view the related investment policy.

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