‘Pakistan looks forward to IMF’s bailout’

ISLAMABAD: Pakistan looks forward to the International Monetary Fund’s (IMF) support for the government’s efforts aimed at achieving an economic turnaround, the finance minister said on Tuesday.

The Finance Minister Asad Umar expressed the government’s willingness for the bailout at a meeting with the visiting IMF mission led by its chief Harald Finger.

The statement clearly indicates that Islamabad is willing to take a bailout package from the IMF. Yet, the program’s size will depend on the financing gap projected for over the next three years under the extended fund facility (EFF).

“We will have to seek IMF program in the range of $6 to $8 billion under EFF for next three years period,” said an official privy to the IMF-Pakistan’s meeting that begun last meeting. The final decision is expected till November 20.

Officials said the government would have to show that it takes measures to reduce budget deficit and increase tax revenue to avert becoming one- or two-tranche country for which Pakistan is known for among the Breton Wood institutions, including IMF and World Bank.

Pakistan is struggling to replenish its dwindling foreign exchange reserves that fell more than 40 percent since January. Saudi Arab committed three billion dollars to bolster Pakistan’s balance of payment position, while another three billion dollars a year for oil on deferred payments.

Officials said the country is expected to receive the first installment of more than $1 billion from Saudi Arabia this week.

Though Pakistan’s high-powered team returned back from China after discussing modalities on the proposed economic package from China, all concerned officials are tightlipped over the details.

“Things are in process,” a top official tersely remarked when asked about the Chinese package.

The finance ministry said the IMF mission’s leader shared his initial assessment with the finance minister on various sectors of the economy, following the delegation’s interaction with the officials of relevant ministries and entities. The finance minister shared the government’s vision on economy with the delegation.

Umar referred to the corrective measures being taken to remove imbalances in the economy. “The new government came to power with an agenda of wide ranging reforms,” a statement cited the finance minster as saying.

“He said the government has a strong resolve for implementing deep structural and institutional reforms. It is committed to safeguarding the poor and vulnerable segments of the society and shall invest more in social protection, human development and creating employment opportunities.”

The finance minister said revival of domestic industry and export sector are high priorities of the government along with structural and governance reforms.

The mission will continue its discussions with the relevant authorities during the next several days.