The government may request the International Monetary Fund (IMF) Executive Board meeting today (Friday) for extension of $11.3 billion stand-by-arrangement (SBA) programme officially expiring on December 31, it is reliably learnt. Sources said the IMF programme is almost suspended from May 2010 due to Pakistan's failure to comply with performance criteria agreed with the fund.
They said that Pakistan will avail in-built facility of three months extension in the SBA programme to comply with the performance criteria for implementation of RGST to qualify for the remaining two instalments and to remain in the programme. As now the programme is expiring on December 31 and economic managers have not been able to comply with critical condition of Reformed General Sales Tax (RGST), sources said that the request would be made for extension. This would be the last meeting of the IMF board in current calendar year as 'Christmas and New Year' holidays would be starting after December 20 and continue till January 1, 2011.
Sources said the economic team informed the Prime Minister during recent meeting on economic situation of the country about the possible economic crisis the country may face in case the IMF did not release remaining two instalments because of non-compliance of performance criteria of RGST implementation. The economic situation is very grim and remaining two instalments are very critical for the country, said an official on condition of anonymity.
About another condition of the Fund with respect to reforms in power sector, a meeting presided over by the Secretary Finance was held in the Ministry of Finance on Thursday, a day ahead of IMF executive board meeting to finalise the reforms report. The IMF board would be informed about reforms so far made in the power sector and also about the Prime Minister directives regarding restructuring of State Owned Enterprises (SOEs) and constitution of a board to regulate the affairs of the Distribution Companies (DISCOs) by minimising the bureaucratic hurdles.
Sources said as far as implementation of RGST is concerned, the economic team would inform the IMF about the briefing to be given to the political leadership before the forthcoming session of the National Assembly on December 20. The IMF board would also be informed about the technical level talks held with the provinces on finalisation of draft RGST law.
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