A three-member International Monetary Fund (IMF) mission has met with senior officials of Finance Ministry and Federal Board of Revenue (FBR) to seek assurances before submitting the final staff level mission report on Sixth Review of Extended Fund Facility successfully completed on 6 February 2015 to its Executive Board, informed sources revealed to Business Recorder.
When BR contacted an IMF Islamabad-based official to know whether the visit of the three-man IMF team is an indication that Pakistan is no longer considered a security threat for the IMF missions, as the fourth/fifth and sixth review missions were held in Dubai, he didn''t respond.
The IMF delegation comprises Masood Ahmed, Director East and Central Asia Development, Herald Finger new Mission Chief for Pakistan and Tokhir Mirzoev the IMF Resident Representative for Pakistan. It is not a visit to introduce the new mission leader to Pakistani officialdom, sources said, adding given the mission''s range of scheduled meetings.
The three-man IMF mission met with Secretary Finance and other senior officials of the ministries concerned on Monday. A senior official told Business Recorder that the IMF delegation was also scheduled to meet with the Governor State Bank of Pakistan (SBP), Secretary Economic Affairs Division (EAD), Chairman Federal Board of Revenue (FBR), Secretary Privatisation, Secretary Commerce as well as officials of budget and Secretary Benazir Income Support Programme (BISP).
An official on condition of anonymity said the revenue collection and subsidy for the power sector remains a major issue; and the Fund management may have dispatched the team to appease the Board member concerns with respect to the expected downward revision in the revenue target as well as rise in subsidy to the power sector.
The IMF Board is scheduled to meet on 27-28 March, according to Secretary Finance Dr Waqar Masood. Its approval of the staff level report on Sixth Review of EFF is necessary prior to the release of the next tranche, he added. Pakistani authorities maintain that as the commitment with respect to revenue measures has been complied with and the granting of State Bank of Pakistan (SBP) autonomy would have to be met by end-June and end-December 2015 there is no likelihood of the IMF Board not granting approval for the tranche release.
A statement issued by Finance Ministry notes the following. The new IMF Mission Chief has said he was impressed by the economic headway Pakistan had achieved in the past months under the present government and hoped that things would further improve in the next three years. He stated this at a meeting with Finance Minister, Ishaq Dar on Monday. He was accompanied by Masood Ahmed, Director, IMF and Tokhir Mirzoev, Resident Representative of the IMF to Pakistan.
Herald added that improvement in the economy was a joint effort of the team led by Finance Minister Dar and it was to be seen how Pakistan economy would perform in future. Masood Ahmed, Director IMF, said Pakistan''s economy presented a totally different picture now compared to what it was 18 months ago. There was comparative economic stability and this could serve as a good foundation to further build up the economy in future, truly turning Pakistan into an emerging economy. He emphasised focus on broadening the tax base, improving investment regime and enhancing competitiveness of the economy.
Finance Minister Ishaq Dar welcomed the visiting delegation acknowledging the financing of USD 6.64 billion from the IMF to support Pakistan under the Extended Fund Facility (EFF) approved by the IMF Board on September 4, 2013. The minister said Pakistan had met all the structural benchmarks and quantitative performance criteria set for the Sixth Review.
The minister apprised the delegation about the problems that the present government had inherited in the form of energy shortages, a weakened economy and scourge of extremism. Dilating on the energy issues first, he said new power projects had been undertaken and 4,000 MW was already ensured to be added to the national grid. Further, the Chinese side had also undertaken to set up power plants on government-to-government basis which could produce up to 10,000 MW of electricity.
Regarding elimination of terrorism, the minister said Pakistan had incurred over $100 billion in economic losses and suffered 50,000 casualties (including 5000 military personnel) in the long drawn war on terror. The government had pursued the path of dialogue to resolve the issue of militancy but finally had to resort to full-fledged military action. He said the Operation Zarb-e-Azb was launched with a vigour which had yielded results as high profile targets had been eliminated. He said, "We have shared the details with the donors at three conferences held over the past few months aimed at drawing up plans for rehabilitation of the TDPs as well as flood affectees."
Regarding economic profile of the country, the minister said due care had been extended to social protection measures and added he was proud to have pioneered the income support programme back in 2008 which was ultimately adopted by the government of the day as a social safety programme. He said the present government under PM Nawaz Sharif had already enhanced the number of recipients under income support programme to 4.8 million and aimed to achieve target of 5 million beneficiaries by 30th of June this year. He said in order to facilitate individual taxpayers, the government had declared the national ID card number as the National Tax Number.
The minister said the government had shifted all the benefit of decrease in oil prices to consumers and against all forecasts, did not enhance the prices for the month of March and instead made adjustments in the GST to keep the price level. The decision was hailed by people at large. Dar said health of economy could be gauged from the fact that Pakistan had already crossed the $16 billion forex reserve mark and qualified as IBRD client.
He also mentioned the visit of the US Commerce Secretary for participation in the Pak-US Business Opportunities Conference, which he said would facilitate fruitful interaction between businessmen of both the countries. The minister also mentioned Pakistan''s exit from the FATF''s grey list to white list which manifests Pakistan''s concerted efforts for curbing anti-terror financing and money laundering.
On medium-term economic targets, the minister said we wish to achieve $20 billion forex reserve target and endeavour to keep the inflation rate to single digit. It was as low as 3.2 percent in February 2015. As for the investment to GDP ratio, ideally we wish it could climb to 22 percent. The Finance Minister also commented that the government had taken concrete steps aimed at enhancing ease of doing business and these would in turn enhance Pakistan''s standing as a good economic, investment market among countries of the region. At the conclusion of the meeting, the minister wished the visiting IMF team a pleasant stay in Pakistan and hoped for continued co-operation.
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