Page 11 - Pakistan Link - May 17, 2019
P. 11

PAKISTAN                                                                                                           MAY 17, 2019  –  PAKISTAN LINK  –  P11
              Pakistan Reaches Agreement with IMF,                                                     Opposition Calls IMF Deal


                To Receive $6 Billion over Th  ree Years                                                      a ‘Complete Sellout’
























                                                                                                  Islamabad: Th  e opposition parties on   the IMF?” she asked.
                                                                                                  Monday lashed out at the Pakistan Teh-  She further questioned the ab-
                                                                                                  reek-i-Insaf (PTI) government’s agree-  sence of senior offi  cials of the fi nance
                                                                                                  ment with the International Monetary   ministry from the negotiations and
                                                                                                  Fund (IMF) on a $6bn bailout to imple-  predicted that a “tsunami of infl ation”
                                                                                                  ment  an  “ambitious  structural  reform   was about to come.
                                                                                                  agenda” over a period of 39 months.  PML-N’s secretary general Ah-
                                                                                                      Maryam Nawaz, a vice president   san Iqbal, in a conversation with Du-
                                                                                                  of the PML-N, called the agreement a   nya News, warned that the opposition
        Under the program, the government is allocating an additional Rs80 billion for social safety programs like Ehsaas and the   “complete sell-out of [the country’s]   would “give a joint reaction against the
        Benazir Income Support Program in order to minimize the burden on the common man          sovereignty” and added that it had been   government’s anti-people policies dur-
        Islamabad: Th  e technical teams of   that Pakistan has agreed to as part of   ties’  adjustment  eff orts  and  ensure   “rejected by the stock market”.  ing the National Assembly’s budget ses-
        the government and the Interna-  the agreement, Dr Shaikh said there   that the medium-term program ob-  In a tweet, Maryam said that the   sion”.
        tional Monetary Fund (IMF) have   were many things desired by the   jectives can be achieved”.   incumbent  government  has  led  the   He added that the government has
        reached an agreement on a bailout   Fund that the government already   IMF mission chief Rigo in his   country to the “brink of [an] economic   “left  the people at IMF’s mercy”.
        package for Pakistan, Adviser to   saw as being in the country’s inter-  statement added: “Pakistan is facing   disaster” in just nine months.  Iqbal also quoted a tweet regard-
        Prime Minister on Finance, Rev-  est. Th  ey include aligning expen-  a challenging economic environ-  “IMF or no IMF - the incompe-  ing the alarming stock market trend,
        enue and Economic Aff airs Dr Ab-  diture with resources, improve the   ment, with lackluster growth, el-  tent rulers were not sure. Finally, when   saying:  “Naya  Pakistan  and  tabdeeli
        dul Hafeez Shaikh announced on   functioning of loss-making state-  evated infl ation, high indebtedness,   it does come, it’s a complete sell-out of   (change) are on their way! Watch the
        Sunday.                       owned enterprises, curtail the subsi-  and a weak external position. [...]   our sovereignty and rightly REJECTED   highlights of the ‘92 World Cup’s fi nal
            “Aft er months of discussions   dies available to the wealthy classes   Th  e authorities recognize the need   by the stock market,” she tweeted. “Aft er   and enjoy.”
        and negotiations, a staff -level agree-  and tax the rich segments.  to address these challenges, as well   just 9 months, country is on the brink   Th  e Pakistan Stock Exchange
        ment has been reached between     “Th  ese structural changes are   as to tackle the large informality in   of [an] economic disaster.”  (PSX)  experienced  a  bloodbath  today
        Pakistan and the IMF,” he said while   in our interest if we want to take our   the economy, the low spending in   PPP Senator Sherry Rehman also   with  the  benchmark  KSE-100  Shares
        speaking on state-run PTV News.  people in the direction of prosperity   human capital, and poverty. In this   criticized the agreement and demanded   Index shedding 937 points — a loss of
            Dr Shaikh revealed that Paki-  and improve their quality of life,” the   regard, the government has already   the government to brief the Parliament   more than 2.7 per cent — during intra-
        stan would receive $6 billion worth   adviser said.         initiated  a  diffi  cult,  but  necessary,   on the conditions of the deal.   day trading. Analysts held the tough
        of assistance under the IMF pro-  He informed the government   adjustment to stabilize the economy,    “Under what terms and condi-  conditions attached with the IMF bail-
        gram over a period of three years.  wants to send “a signal of fi nancial   including thorough support from   tions is the government pledging Paki-  out package responsible for the bearish
            Th  e salient features of the Paki-  discipline”  and  resolve  fi scal  chal-  the State Bank of Pakistan. Th  ese ef-  stan and its institutions as a collateral to   rule at the bourse.
        stan-IMF accord are:          lenges, and the program would en-  forts need to be strengthened.
            •   Pakistan to receive $6 bil-  tail  raising  prices  in  some  areas  in   “Decisive policies and reforms,   ‘IMF Accord Should Be Presented
        lion over three years         order to recover the costs.   together with signifi cant external
            •   Islamabad  to  also  receive   “However [...] the government   fi nancing are necessary to reduce   before Parliament,’ Says Umar
        $2-3bn from World Bank, ADB, etc.  is focused on not putting too much   vulnerabilities faster, increase con-
            •   Finance adviser hints at   burden on the common man,” Dr   fi dence, and put the economy back
        raising prices in some areas “to re-  Shaikh said. Explaining his point,   on a sustainable growth path, with   Islamabad: Former fi nance minis-
        cover costs”                  he said that if the power tariff  is in-  stronger private sector activity and   ter Asad Umar was on Monday ap-
            •   Decisive  policies  and  re-  creased under the IMF program, it   job creation.”   pointed the chairman of the Nation-
        forms necessary for growth: IMF  will not aff ect consumers utilizing   Th  e IMF mission chief empha-  al Assembly’s Standing Committee
            •   IMF says ‘market-deter-  less than 300 units, “and this in-  sized that in addition to the EFF,   on Finance.
        mined exchange rate’ to help the fi -  cludes 75pc of electricity consum-  “a comprehensive plan for cost-  Umar — who was removed
        nancial sector                ers”. For the same reason, the gov-  recovery in the energy sectors and   from the offi  ce of the fi nance minis-
            He said the staff -level agree-  ernment is allocating an additional   state-owned enterprises will help   ter last month — was unanimously
        ment, which must still be approved   Rs50 billion for an electricity sub-  eliminate or reduce the quasi-fi scal   elected aft er his name was proposed
        by the IMF board of directors in   sidy in the upcoming budget.  defi cit that drains scarce govern-  by PPP’s Naveed Qamar and sec-
        Washington, would show that ef-   Under the program, the gov-  ment resources”.            onded by Pakistan Tehreek-i-Insaf’s
        fective reforms were underway in   ernment is also allocating an addi-  Rigo said the forthcoming bud-  (PTI) Sardar Nasrullah Khan Dre-
        Pakistan.                     tional Rs80 billion for social safety   get for FY2019-20 is “a fi rst critical   shak.
             “Th  e Pakistani authorities and   programs like Ehsaas and the Bena-  step” in the fi scal strategy of the   Following  his  appointment,
        the IMF team have reached a staff    zir Income Support Program in or-  PTI government. “Th  e budget will   Umar said that the bailout agree-
        level agreement on economic poli-  der to minimize the burden on the   aim for a primary defi cit of 0.6 per   ment reached between Pakistan and
        cies that could be supported by a   common man.             cent of GDP supported by tax policy   the International Monetary Fund   meeting of the parliamentary party
        39-month Extended Fund Arrange-   Asked whether this would be   revenue mobilization measures to   (IMF)  should  be  presented  before   of the ruling PTI held at Parliament
        ment (EFF) for about US $6 billion,”   Pakistan’s last IMF program, Dr   eliminate exemptions, curtail spe-  the parliament.  House.  Umar had  later  told  Dawn
        an IMF  press  release  quoted IMF   Shaikh said: “It depends on how   cial treatments, and improve tax ad-  He said the government has to   that he himself had asked the prime
        Mission Chief for Pakistan Ernesto   successfully we as a country imple-  ministration,” he added.  take practical measures in order to   minister to be given the committee’s
        Ramirez Rigo as saying.       ment this program and approach    Noting that infl ation in Paki-  reach an agreement and therefore   chairmanship “because I have some
            Dr Shaikh said IMF is an inter-  it as a reform or structural change   stan “disproportionately aff ects the   “the  government  should  be  ques-  expertise in fi nancial matters which
        national institution whose primary   program instead of a mere revenue-  poor”, the IMF offi  cial said the State   tioned regarding this accord.”  I want to utilize”.
        job is to assist member countries   earning program.”       Bank of Pakistan will focus on re-  Th  e former minister also   He assured the committee that
        who are in an “economic diffi  culty”.   Decisive reforms necessary:   ducing infl ation and safeguarding   vowed to inform the public about   no negotiations had taken place
        He said the government could not   Th  e facility aims to support Paki-  fi nancial stability.   the discussions he had with the IMF   with the IMF regarding Pakistan’s
        have bridged the fi nancing gap of   stani authorities’ “strategy for stron-  “A  market-determined  ex-  regarding the program before his   defense budget.
        $12 billion on its own that he said   ger and more inclusive growth by   change rate will help the functioning   ouster.    PPP’s Nafi sa Shah, who is a
        was created by a weak economy.  reducing domestic and external   of the fi nancial sector and contrib-  “What discussions were held   member of the committee, com-
            Besides the IMF assistance,   imbalances, removing impediments   ute to a better resource allocation in   with the IMF [and] what we have   mented that the fi nance ministry
        Pakistan will also receive additional   to growth, increasing transparency,   the economy,” he said.  achieved through the program [...] I   was so far silent on the agreement
        funds worth nearly $2-3 billion from   and strengthening social spending”,   “An ambitious structural re-  will tell the nation about this,” Umar   signed with the IMF. She said Umar
        institutions like the World Bank and   the IMF statement said.  form agenda will supplement eco-  said.                  was part of the negotiations that
        Asian Development Bank, the ad-   It said fi nancing support from   nomic policies to rekindle economic   Th  e decision to appoint Umar   preceded  the  agreement  and  he
        viser revealed.               Pakistan’s international partners will   growth and improve living   as the chairman of the NA fi nance   should, therefore, inform the people
            Asked to share the conditions   be “critical to support the authori-  IMF, P24         panel was taken last week during a   about the “facts” of the accord.
                                                                       www.PakistanLink.com
   6   7   8   9   10   11   12   13   14   15   16