Page 11 - Pakistan Link - May 17, 2019

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.
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