Thursday February 29, 2024

No accord with IMF in case of tough conditions: Asad

October 14, 2018

ISLAMABAD: Minister for Finance Asad Umar Saturday said that the government would not sign agreement with IMF if it proffered some tough and unbearable conditions for the loan.

He said that in the past Pakistan signed loan agreement 18 times with the IMF but this time a storm in a tea cup was heaved from every nook and corner of the country. It seemed that PTI government has carried out any outlandish job.

He said that in current financial circumstances, the bailout package from IMF was very essential because the level of foreign reserve touched Rs8.40 billion, trade deficit swelled due to price hike of natural gas and electricity, imports were enhanced due to ban imposed on Iran and above all running fiscal deficit was $2 billion per month.

He said that decision to opt for going to IMF by previous government was correct as Ishaq Dar had no choice.

Rejecting US narrative about Pakistan’s request for fresh bailout package from the IMF mainly because of CPEC repayments, Asad Umar said that Pakistan would disclose all debt details to the IMF under debt sustainability indicators including $900 million repayment of loans to China over next three years period.

The minister also said that Pakistan would not accept IMF’s non-economic conditions on matters of national security as apprehensions were expressed by many but no country could compromise on such issues.

He claimed that neither he nor Imran Khan had ever talked about not approaching the IMF after coming into power, adding that he had always talked about requirement of getting bailout package from friendly countries or from the IMF.

“There is nothing to hide related to repayment of loans to China and US narrative is 100 percent wrong because facts don’t support it. Out of total debt, repayment is estimated at $9 billion for the current fiscal year and repayment to china of $300 million per annum will kick-start from next year over the period of next three years”, Federal Minister for Finance Asad Umar said in a press conference here at Q Block (Ministry of Finance) on Saturday.

Flanked by Adviser to PM on Revenues Hammad Azhar on this occasion, Asad Umar said that Pakistan was still negotiating oil on deferred payment with Saudi Arabia. To another query regarding stopgap arrangement to avert eruption of balance of payment crisis until the IMF loan is approved, the minister said that they were working on it for requesting friends to get assistance and he was going to brief the prime minister soon.

Regarding US onslaught against CPEC, he said that he had explained details of loans related to CPEC repayments with US Under Secretary of Treasury during his meeting and in his meeting with IMF MD, he had only explained repayment of loan under debt sustainability indicators which had nothing to do with the CPEC.

The minister said that US possessed weightage of 16.4 percent in IMF’s Executive Board but it did not enjoy veto power as the Fund took decision with 51 percent weightage on the basis of majority. He conceded that Washington enjoyed influence but Pakistan is also shareholder of the IMF and Pakistan is hopeful that IMF will take decision in accordance with its charter. He said that Pakistan would seek IMF three-year programme and mission team would visit Islamabad from November 7 to work out details of the next Fund programme. He said that Pakistan’s financing gap stood at $12 billion and one component of it would be provided by the IMF while remaining portion of this financing gap would be filled through avenues including the WB, ADB and others.

He said that China did not have any problem in ensuring transparency related to CPEC loans as they were actively working against the corruption and even hanged a minister involved in such crimes. He said that he was pleased that the IMF was also talking against corruption.

He said that the recent devaluation of rupee against dollar was ‘deliberate move’ taken by the State Bank of Pakistan (SBP) and there was no need to get approval from him or Ministry of Finance.

To another query regarding cost of IMF programme for poor masses, the minister said that Pakistan had to devalue its currency by 26 percent and hiked discount rates by 2.75 percent in last one year when the country was not under the IMF programme because there was cost attached to wrong decision making on economic front. If Pakistan decides not going to IMF, there will be more requirement of adjustments having more burden for masses, he added. He said if Pakistan’s economy did not improve after five year at completion of tenure, PTI would be responsible for this mess, adding that as the last PML-N-led government was responsible for the difficulties being faced by the people and the government today.

He said that Pakistan had obtained 18 programmes so far including 7 programmes during the tenure of military regimes and 11 programmes during the democratically elected governments so there was nothing new on this front.