By: Hassan Zubair
A few hours ago Finance Minister of Pakistan , Miftah Ismail departed for Washington with high hopes of renegotiating with International Monetary Fund (IMF) the $6 Billion Fund Facility Programme.
In May 2019 , the officials of Pakistan Government and IMF reached to an agreement regarding country’s economic policies and more importantly the three-year extended funds facility (EFF). According to the agreement both parties came to an agreement that Pakistan will receive $ 6 Billion during 39 months period. Unfortunately due to the political instability and crisis Pakistan was only able to receive half of what was agreed upon ,in the said agreement. However our Finance Minister, Miftah Ismail was confident yet a bit nervous in persuading the IMF to release those remaining funds to Pakistani ,current, Government Officials.
Even though the review is approved by the IMF . The funds released for Pakistan will be $900 Million and other external funds will also be unlocked . With cavernous current account deficit and with falling foreign reserves of $10.8 Billion are a proof of immediate external financial support for this Country .
The new government now faces some tough decisions since according to them the previous government worsened the whole financial situation of Pakistan by announcing the subsidies on different programmes to people.
Finance Minister tweeted and i quote, “I am off to Washington DC to try and put back on track our IMF programme that PTI and [Imran Khan] derailed, thus endangering our economy, and more happily, after [three] years of being on ECL, I will get to travel to London on the way and meet my leader Mian Nawaz Sharif.”
CONDITIONS BY IMF
According to our sources IMF has set five conditions for Shabaz Sharif Government. Finance Minister , Miftah Ismail revealed to ‘iPak’ correspondents that basically IMF demands Shabaz Sharif to slash down the deficit by Rs 1300 Billion by withdrawling fuel subsidy of Rs 150 Billion on monthly basis. They also demanded to take additional taxation measures to resuscitate the stalled Fund Programme.
He revealed the conditions to be as follows:
- Withdrawl of Fuel Subsidy
- Increasing power Tariff
- Doing away with the tax amnesty scheme
- Taking additional taxation measures
- Reducing the development programme by Rs 100 Billion. (to bring it down to Rs 600 Billion through the PSDP till the end of the current fiscal year)