ISLAMABAD  -   Talks between Pakistan and the International Monetary Fund started here as Islamabad is seeking bailout package from the multilateral lender to make up its draining foreign exchange reserves.

The IMF mission, led by its chief Herald Finger, arrived in Pakistan on Tuesday night. The talks will continue till November 20. The talks will be held in two phases, as the initials three to four days are for technical discussions that would be followed by policy dialogue on the specific contents of the potential programme. Finance Minister Asad Umar will head talks from November 12-13.

Sources revealed that ministry of finance’s officials had held discussions with the Fund on the first day (Wednesday) of the ongoing talks. They said that ministry of finance shared the data of budget deficit, current account deficit, exports, imports, revenue collection and economic data. In the days to come, the government will brief the Fund on the circular debt, privatisation policy and affairs of State Bank of Pakistan.

The government has not decided yet about the volume of loan package from the IMF. “The government will finalise volume of loan after finalising package from China as Pakistan’s high-level delegation is scheduled to visit Beijing from November 9 for finalising package for a balance of payment support,” said an official of the ministry of finance.

Pakistan is looking to get package from China as recently agreed with the Saudi Arabia. Saudi Arabia will place $3 billion cash deposit in the account of SBP. In addition, it would also provide a one-year deferred payment facility for the import of oil, worth up to $3 billion. Pakistan wants that China should deposit some cash in the account of SBP for some time to enhance the country’s foreign exchange reserves.

The sources said that IMF’s loan package would be around $6-$7 billion if China agrees to give some package to Pakistan. The current talks are aimed at reaching a staff-level agreement, which would be submitted to the IMF’s executive board for consideration. The IMF programme will require 6 to 8 weeks for approval after things settle in the talks, according to an official of ministry of finance. The government would present Memorandum of Economic and Financial Policies (MEFP) to the IMF.

No harsh IMF condition acceptable: Asad

APP adds: Minister for Finance Asad Umar on Wednesday said concrete measures would be taken to increase exports to further strengthen the national economy. During the recent visit of Prime Minister Imran Khan to China, the Chinese president had assured to help enhancing Pakistan’s exports, he said talking to a private news channel.

He said during the visit, talks were held with China about transfer of leading technology of cyber security.

The minister said any condition of International Monitory Fund (IMF) against the national interest would not be acceptable and expressed hope that this would be the last programme of IMF for the country.

He said the previous government had taken massive loans from international organisations, which was why the country was confronting economic challenges. Loans were indispensable but the governments should try to take less loans, he added.

Asad Umar said a huge amount of the loan, instead of being utilised for the welfare of masses, was going directly to pay the loan’s interest, adding Rs 1,900 billion would be paid in shape of loan interest this year.

He said the government had approved to import 50,000 ton urea fertilizer this year for Rabi crop. The minister said the government would not privatise PIA and Steel Mills, but would make them profitable organisations. Task had been given to Minister for Trade Razak Dawood for formulating the policy to run the Steel Mills in 45 days, he added.

He said no compromise would be made on national security and decisions would be taken for the betterment of the nation and larger interest of the country.

Replying to a question, Asad said he met with Alice Wells who was the Deputy Assistant Secretary of State for the Bureau of South and Central Asian Affairs and discussed with her matters of economy and IMF programme.

He said crackdown was needed to be done against money laundering and legislation would be made for this purpose.

The minister said the government had only imposed tax on luxurious items in budget, without putting burden on poor people. Asad said inflation was still in single digit and the inflation ratio was four percent on 20 percent of the poor people in the country.

 

 

Loan volume undecided as Pakistan opens talks with IMF