Finance Minister Asad Umar has constituted a seven-member core group to formulate a Memorandum of Economic and Financial Policies (MEFP) for discussion with the International Monetary Fund (IMF) aimed at getting financial assistance of about $ 6 billion, well-informed sources told Business Recorder. IMF delegation is scheduled to visit Islamabad from November 7-20 for discussion on MEFP with Pakistani authorities.
Headed by Secretary Finance, the Working Group will comprise Special Secretary Finance , Noor Ahmed, Director General Economic Reforms Unit/Advisor to Ministry of Finance, Haqan Hasan Najeeb, Additional Finance Secretary (EF wing) Kamran Ali Afzal, Additional Secretary( Budget Wing) Naveed Allauddin, Joint Secretary (budget) and Coordinator (budget), Talib Hussain Baloch.
The following focal persons will assist the core group by provision of data, statistics and other relevant material: (i) Economic Advisor, Ejaz ali Wasti (Finance Division); (ii) Additional Secretary, Ali Raza Bhutta (Planning Division); (iii) Member (FBR), Dr Muhammad Iqbal; (iv) Director General (Debt), Ehtasham Rashid (Finance Division); (v) Deputy Secretary (Provincial Finance), Abdul Malik Balghari (Finance Division); (vi) Joint Secretary, Zargham Eshaq Khan (Power Division); (vii) Joint Secretary (IF/Investment) Tanvir Butt (Finance Division); (viii) Director General Trade Policy, Muhammad Asharf (Commerce Division); (ix) Hussain Mahmood, Director Petroleum; (x) Deputy Secretary EAD (Debt Management) Sabz Amin; (xi) Director General (donor coordination) Ahsan Mumtaz (BISP); and (xii) Director General (Power) Samreen Zahra (Privatisation Division).
According to sources, the core group will get data from line Ministries on real sector, external sector, China Pakistan Economic Corridor (CPEC), forex reserves, exchange rate issues, remittances, external debt, borrowing from China, fiscal sector, monetary sector, financial sector, import containment measures i.e. effectiveness of 100 per cent cash margin, recently introduced Regulatory Duties (RDs) on import items, effectiveness of tariff increase, estimate import containment in 2017 and expected in 2018-19, tariff barriers ( quarantine requirements on food import) and the estimated impact on import).
Power Division will be asked to provide details about advancement on the China Pakistan Economic Corridor (CPEC) projects in the energy sector, including type of projects and financing modalities, envisaged CPEC projects for FY 1018/19 and over the medium term, modalities of power purchase for CPEC and other power additions, including government power purchase guarantees, for Independent Power Producers (IPPs).
Power Division will provide data from end December 2017 to end-June 2018 and the latest data on stock of arrears in the power sector as well as arrears held in PHPL estimated at Rs 1.3 trillion.
The Core Group will also seek data on flow of new arrears at end-December 2017 and end-June 2018 and contributory factors including: (i) non-recoveries;(ii) accrued mark-up;(iii) line loses;(iv) GST non-refund;(v) late payment surcharge;(vi) reasons of delay tariff determination;(vii) operational deficit/ surplus of the system;(viii) impact of oil prices; and (ix) stock clearance, in addition data on electricity subsidies by end-June 2018 along with data on the estimated needs for budgetary power subsidies in FY 2018/19.
Reuters adds: Pakistan still plans to seek a bailout from the International Monetary Fund (IMF) despite a Saudi Arabian offer of a $6 billion rescue package, Pakistan's finance ministry said on Wednesday.
Prime Minister Imran Khan secured the Saudi package at a high-profile investment conference in Riyadh that has been boycotted by several other leaders over the death of a dissident Saudi writer at the country's consulate in Istanbul.
In the short-term the Saudi loans will give the economy breathing room, but it will not be enough to fully avert a brewing balance of payments crisis, analysts said.
Pakistan will proceed with talks on the country's second IMF bailout request since 2013, and its 13th rescue package from the multilateral lender since late 1980s, the finance ministry said.
"Yes, we are going ahead into programme negotiations with (IMF) in the first week of November," Noor Ahmed, spokesman for the ministry, told Reuters in a text message.
On Tuesday, Pakistan said Saudi Arabia had agreed to provide $3 billion in foreign currency support for a year and a further loan worth up to $3 billion in deferred payments for oil imports to help stave off a current account crisis.
Pakistan's main stock market index closed 4.1 percent higher on Wednesday on the news of the Saudi help.
Pakistan's foreign reserves have plunged 42 percent since the start of the year and now stand at about $8 billion, or less than two months of import cover.
Ahmed said the Saudi loans will strengthen Pakistan's negotiating hand in talks with the IMF, which is likely to push Pakistan to implement painful structural reforms linked to the currency, the energy sector and other areas where Pakistan's global competitiveness has lagged.
Khan said this week Pakistan was seeking help from "friendly nations", which is usually a reference to close allies Saudi Arabia and China, to go along with any IMF programme. Khan is due to travel to China in the first week of November, where he is expected to seek further assistance.