IMF puts more conditions before signing review agreement with Pakistan

ISLAMABAD: Adviser to the Prime Minister on Finance and Revenue Shaukat Tarin has said that the International Monetary Fund (IMF) has demanded the Pakistan government to fulfil some more conditions prior to the sixth staff-level review agreement under its $6 billion Extended Fund Facility (EFF) programme.

In an informal discussion with newsmen at the Corporate Philanthropy Awards ceremony, the adviser said among these prior actions the State Bank of Pakistan (Amendment) Bill, 2021 has to be approved by the Parliament and apart from this withdrawal of tax exemptions and increase in electricity tariffs are significant ones.

Besides, the IMF also wants the Ministry of Law to give final shape to the autonomy bill of the State Bank of Pakistan, he said.

“We have already increased the electricity tariff by Rs1.39/unit and in March 2022, we will see if [the] economy will be in a position to absorb another hike or not,” he said.

Tarin said that the tax exemptions will also be withdrawn soon, adding that the State Bank’s autonomy bill has to be passed by the Parliament because the IMF doesn’t want passage of this bill through the Presidential Ordinance.

The adviser admitted the fact that the IMF conditions are a bit harsh but, at the same time, he added those who signed this agreement should be held responsible not him. “Just for the sake of $500 million, we signed the agreement without realising the consequences of it,” Tarin said.

The adviser said he tried his level best to roll back or minimise the IMF conditions but the government has already given them a commitment in writing to fulfill them.

Tarin refused to comment on the monetary policy and exchange rate, adding that it is the domain of the State Bank of Pakistan governor.

Regarding reduction of Rs200 billion in the Public Sector Development Programme (PSDP), he said the Federal Board of Revenue (FBR) is exceeding its revenue by Rs250 billion and in the last quarter of the ongoing financial year, the government will be in a position to give Rs60 billion to Rs80 billion for the PSDP.

Earlier in his address, Tarin said the corporate philanthropy in the country increased 50 times in the last 20 years. Directly and indirectly, the contribution of philanthropic activities amounts to Rs500 billion/annum, which is almost one per cent of the GDP and it shows that Pakistani people and companies are very generous, he added.

This year, the GDP growth is likely to remain over 5 per cent. However, the poverty level and standard of living of the common man can only be improved if the economy grows above 5 per cent on a sustainable level in a period of eight to 10 years, he added.