ISLAMABAD: Prime Minister Shehbaz Sharif has assured his Cabinet colleagues that recent negotiations with the International Monetary Fund (IMF) are progressing satisfactorily, indicating that the necessary conditions for the IMF will be met well on time for IMF Board meeting, well-informed sources told Business Recorder.
Pakistan has to meet stringent measures including arrangement of external financing to secure $7 billion IMF package. The Prime Minister emphasized the need for Pakistan to eventually move beyond IMF reliance and assured that the government is committed to making this the country’s final IMF program.
New IMF programme going to be the last one if reforms put in place: Aurangzeb
In his Cabinet meeting opening remarks on September 3, 2024, the Prime Minister praised the Finance Minister and his team, as well as the State Bank of Pakistan and other government organizations, for their efforts in reducing inflation to 9.6 percent in August 2024 from 27.4 percent in August 2023.
He also commended Cabinet members and government officials for their work towards economic stability, while emphasizing the need to address challenges like circular debt, energy pilferage, smuggling, and tax evasion. The Prime Minister reiterated the government’s commitment to economic growth, revenue generation, job creation, and streamlining government operations.
The Prime Minister is expected to meet with the IMF Managing Director in New York during the United Nations General Assembly in the third week of September. Meanwhile, the Pakistani delegation, led by Finance Minister Muhammad Aurangzeb, will participate in the IMF-World Bank Annual Meeting in Washington DC from October 21-26, 2024.
The delegation is also expected to hold bilateral meetings with China, UAE, Turkey, Iran, and Saudi Arabia on the sidelines.
According to sources, Prime Minister is also expected to soon undertake an official visit to Qatar aimed at seeking its support on economic front.
The Ministry of Foreign Affairs (MoFA) has said that the Prime Minister’s visit to Qatar will include discussions on several key agreements. Although the precise purpose of the visit has not been disclosed, it is anticipated that two Memorandums of Understanding (MoUs) will be signed:
(i) a draft agreement for cooperation in the power sector between the Ministries of Energy of Qatar and Pakistan, and
(ii) a draft MoU between the National Power Construction Corporation (NPCC) and Qatar General Electricity and Water Corporation (Kahramaa). MoFA has instructed the relevant ministries to expedite the formalities for these MoUs and provide updates on their status.
Additionally, the Prime Minister is expected to request Qatar to reschedule LNG cargo deliveries due to a current underutilization of LNG by power plants, attributed to an 8% reduction in electricity consumption. Both countries are also set to revise their LNG deal in 2026, for which the Petroleum Division is preparing a plan.
The issues of outstanding payments related to the Port Qasim Power Plant are also expected to be discussed during the visit of Prime Minister to Qatar.
Former Qatari Prime Minister Sheikh Hamad Jasim Bin Jaber Thani has expressed concerns about unpaid dues. Despite reports from the Power Division and Finance Division indicating that 91% of payments due to the Port Qasim Electric Power Company have been made between July 2017 and July 2024, SAPM Tariq Fatemi is puzzled by the lack of payment received by the Qatari company, which holds a 49% stake in the project alongside Power China.
Fatemi has requested Power Division to send a draft reply to the Prime Minister Office to send to former Qatari Prime Minister, adding that the response should clarify Pakistan’s efforts to meet its payment obligations despite financial constraints and outline potential options for the former Qatari Prime Minister to receive any remaining payments.
However, Prime Minister Shehbaz Sharif has welcomed the State Bank of Pakistan’s decision to lower the policy rate by two percent, bringing it to 17.5 percent.
He expressed confidence that this reduction would act as a catalyst for revitalizing key sectors of the economy, including exports, investment, business, and agriculture.
Chairing a federal cabinet committee meeting, the prime minister highlighted the potential for further rate cuts, aiming to eventually reach single digits to align with inflation. He emphasised that reducing borrowing costs is essential for accelerating Pakistan’s overall economic growth.
The Ministry of Industries and Production presented report to the cabinet committee on sugar exports was submitted to the cabinet. The cabinet expressed satisfaction with the decision to allow sugar exports, noting that it not only generated valuable foreign exchange for the country but also helped keep sugar prices stable. Furthermore, sugarcane farmers received fair compensation for their hard work.
On the recommendation of the Ministry of Maritime Affairs, the cabinet approved instructions to all government institutions to route 50 per cent of their relevant imports—such as wheat, sugar, and fertiliser—through the Gwadar port. This decision aims to boost the operations of Gwadar Port, supporting both Balochistan’s development and national economic growth.
The cabinet also directed that efforts be made to increase exports through Gwadar Port. A sub-committee was formed to present a quarterly report to the cabinet on the progress of imports and exports from the port.
Additionally, the cabinet approved the restructuring of the Board of Directors of the Korangi Fish Harbour Authority, Karachi, on the recommendation of the Ministry of Maritime Affairs. It was directed that all provinces be given representation in such governmental boards, and that incomplete boards of state-owned corporations be fully constituted as soon as possible.
The cabinet also approved the appointment of Muhammad Yaqoob, assistant director at the Drug Regulatory Authority of Pakistan (DRAP), as the Federal Inspector of Drugs for Balochistan, based on the recommendation of the Ministry of National Health.
On the recommendation of the Ministry of Planning, the cabinet amended its resolution of October 30, 2013, regarding the appointment of Planning Commission members from the open market.
The members’ salaries will now be fixed under the Special Professional Pay Scale-II (SPPS-II) instead of the Management Pay Scale. Additionally, the salary for the Chief Economist, who will also be hired from the open market, will be set under SPPS-I.
In compliance with Supreme Court’s orders, the cabinet approved a recommendation by the Revenue Division to conduct departmental promotion exams for the posts of Inspector Inland Revenue (BPS-16) through the Federal Public Service Commission (FPSC).
The cabinet also ratified the decisions taken by the Economic Coordination Committee (ECC) in its meeting held on August 29, 2024, and the decisions of the Cabinet Committee on State-Owned Enterprises from its meeting on September 2, 2024.
In a separate discussion, Prime Minister Shehbaz Sharif condemned Israel’s continuing aggression in Palestine, specifically calling out the recent killing of six United Nations relief workers and the martyrdom of 17 civilians in Gaza.
Copyright Business Recorder, 2024
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