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Will visit Pakistan ‘before end of April to continue constructive discussions’: IMF

Will visit Pakistan ‘before end of April to continue constructive discussions’: IMF

ISLAMABAD: The International Monetary Fund (IMF) on Monday said that it held “constructive discussions” with Pakistani authorities during last week’s spring meetings in Washington and that its mission will be visiting Pakistan “before the end of April to continue the discussions” on a bailout package.

The announcement was made by the Office of the Resident Representative of the IMF in a press release following reports that the IMF mission’s visit of Pakistan for finalising the package may be delayed as both sides are still engaged in an intense discussion.

“The Pakistani authorities and IMF staff held constructive discussions during the IMF/World Bank Spring Meetings in Washington DC towards an IMF-supported programme,” the IMF statement said.

“At the request of the authorities, an IMF mission will be going to Pakistan before the end of April to continue the discussions.”

It is pertinent to mention here that Finance Minister Asad Umar, who led the Pakistani delegation at the spring meetings, had said earlier this month that the mission would visit Islamabad soon and an agreement should be signed by the end of this month.

The finance minister went to New York on Friday but his team, which includes senior officials of his ministry and other government agencies, stayed in Washington for further talks — Dawn reported.

The sources said that IMF officials were also seeking details of the China-Pakistan Economic Corridor (CPEC), along with a written guarantee from both Pakistan and China that the IMF assistance will not be used to repay loans to China.

Meanwhile, both sides are engaged in “fine-tuning” the details of the proposed IMF programme. Pakistan wants the IMF to review some of the conditions it has attached to the package while the IMF insists that those conditions are absolutely essential for a successful completion of the programme.

Pakistanis point out that this would be their 14th package with the IMF, if finalised. They argue that the conditions attached to previous programmes were also not fully implemented because they were too restrictive. Pakistan wants the IMF to focus on long-term structural reforms that help revive its economy instead of attaching conditions that would be difficult to implement.

During negotiations on the new package, the Pakistani delegation told the IMF that they “do not want to commit to what we cannot implement”.

When asked how much money did Pakistan expect from the IMF, a source said: “The amount and length of the programme also depends on the nature of the package. If the conditions are too restrictive, Pakistan would expect a larger package, i.e. more assistance for a longer period.”

Some of the conditions proposed by the IMF include: making the State Bank independent, a market-oriented exchange rate, expanding the tax target by Rs5,000 billion, ending income tax concessions, more taxes on salaries, narrowing the amount of taxable income from Rs12 lakh a year to Rs4 lakh, reducing electricity and gas losses, no government interference in Nepra and Ogra policies, Rs140 billion electricity and gas revenue losses be recovered from consumers.