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Next govt to renegotiate $6bn IMF loan programme, says Miftah Ismail

April 02, 2022

ISLAMABAD: The next government headed by Shehbaz Sharif will first renegotiate a $6billion IMF loan programme currently hanging in balance in the wake of a relief package and an amnesty scheme to the industrial sector announced by the PTI government and will ask the IMF management to provide remaining $3 billion to Pakistan in the next six months.

This was said by Dr Miftah Ismail, former finance minister of the PMLN government, who may again be appointed the finance minister of the new government in an exclusive talk with The News. He said Pakistan’s finance minister of the new government will hold a meeting with IMF functionaries on April 18 in Washington for the restoration of the $6 billion programme with an aim to get the remaining amount of $3 billion in the next 6 months to help stabilize the fast-depleting reserves and ensure smooth financial supplies from other donor agencies. So far, the IMF has provided $3 billion to Pakistan out of $6 billion. The new government will also go for the review of the programme, seeking softening terms and conditions to get the country out of economic morass and provide maximum solace to the countrymen.

He said there is a hell of difference between Shehbaz Sharif and Imran Khan Niazi. Shehbaz is the person who believes in work, work and work, and he delivered in the past being the Punjab chief minister whereas Imran Khan believes in just talking and walking. “The new government headed by Shehbaz Sharif will make a visible difference and pull the country out of economic mess,” he said and added the IMF programme currently hangs in balance because of the relief package and second amnesty scheme announced by the Imran Khan government. Imran first announced the amnesty scheme for the real estate sector to benefit his friends and now announced the same for the industrial sector, knowing the fact that Pakistan is still under the FATF watch.

He said Pakistan’s reserves alarmingly went down by $4.3 billion in March and $2.9 billion in the last week. Though there is a less room to manoeuvre given the fiscal position of the country for the next government and undertake immediate steps to provide relief to the masses, yet the new government will leave no stone unturned to relieve the masses who have been facing high inflation in the last three and a half years. “We will introduce the best-ever governance and restore the smooth supply chain of kitchen items that include sugar, atta, edible oil, milk and vegetables.” The PTI government has laid down mines for the next government, but Insha'Allah the next government will overcome all fiscal woes. Ismail said the Pak rupee has depreciated to its lowest ebb against the US dollar, referring to the current rupee-dollar parity that stands at Rs 184.80 in interbank and Rs 186 in open market. “This is the main cause of inflation in the country that needs to be addressed.” He said the country’s economy is bleeding with circular debt in the power sector that has risen to Rs 2.8 trillion. And the circular debt in the gas sector has gone up to Rs 650 billion with receivables of the PSO hiking to over Rs 500 billion. He said PMLN supremo Nawaz Sharif, in his last tenure, had added 12,000 MW to the national grid, but because of the incompetent PTI government, the country is facing a 5,400 MW reduction in power generation. People are facing power outages because of the non-availability of the required fuel stock. “In the new government, the government will prefer to ensure the electricity supply to the industrial sector at lower rates than in India, Sri Lanka and Bangladesh,” he said.

He said the new government would first restore the fuel supply to the power sector so that people get an uninterrupted electricity supply in summer. He pointed out that this government has not taken timely steps to ensure furnace oil, coal and gas for power generation in the country, keeping in view the increasing demand of electricity on account of surging mercury. “The wheat production remained short of target because of inadequate PTI government policies and the government had to import wheat, knowing the fact that its price has increased in the global market mainly in the wake of the Russian-Ukraine war. Urea was not made available to farmers despite its super production. The PTI government helped its unscrupulous ‘friends’ to smuggle out urea for windfall profits. He said the next government would focus on more GtG gas supply contracts to ensure the smooth supply of LNG in the country.