WASHINGTON: Officers from the International Monetary Fund( IMF) are viewing Pakistan’s budget for 2022- 2023 as a document that contains points for further accommodations on continuing an IMF package for Islamabad.
On Friday, Pakistan unveiled a$ 47 billion budget for 2022- 23, which includes several financial connection measures that Islamabad hopes will move the IMF to renew the important- demanded bailout payments to the country.
Politic sources in Washington say that at the staff- position addresses, held in Doha last month, the IMF and Pakistan reached an understanding on several crucial issues, similar as withdrawing subventions and adding the duty collection.
Sources said one of the crucial points on which both sides set up themselves in the agreement was social protection, i.e. reducing the impact of austerity measures on the poor. “ IMF officers admit that some of these measures can hurt the poor and are ready to work with Pakistan to reduce the impact, ” one of the sources said.
After the first round of addresses with IMF officers in Washington in April, Finance Minister Miftah Ismail had suggested issuing energy passes for vehicles used by the common people or for public transport.
“ The mediators can also work on reducing the impact on essential goods, similar as food particulars, ” another source said. Indeed the price of locally- produced essential goods can go up when energy prices are increased.
Analogous arrangements could also be made for the power sector to cover low-end consumers, one of the sources said, pointing out that the IMF views similar measures as “ social protection ” and would be ready to help the government in doing so.
The sources also rejected media enterprises that the IMF would not negotiate with an interim government. “ The IMF will have no problem in dealing with an interim government if the way they negotiate can be enforced within their term, ” one of the sources said.
Another source said that “ the IMF has enterprises about governance and corruption as well ” and would “ not like to be associated with any program perceived as open to corruption ”.
“ The Fund would also not like to be seen as helping one set of politicians against another, whether they’re in powers or in the opposition, ” the source added.
The purpose of the measures suggested by the IMF is to check Pakistan’s financial and current account poverties, the sources said, adding that the Fund wants a better arrangement this time as the former government swerved from programs agreed upon in the last review.
The government has formally withdrawn energy and power sector subventions given by its forerunners, which fractured the arrangement with the IMF.
The measures blazoned in the budget include two percent fresh duty on individualities with periodic income of 30 million rupees, a 20 percent increase in duty collection by precluding elusion and reducing energy consumption to check the ever-widening oil painting bill.
The government has also indicated that it may further increase energy prices, a measure that will hurt consumers across the board. The government also plans to raise 96 billion rupees from privatization in2022/23.
IMF Pakistan Representative Esther Perez Ruiz had told the media on Monday that Pakistan needs to take more strict measures to keep the Fund’s loan program on track.
Pakistan had inked a 39- month,$ 6bn Extended Fund Facility with the IMF in July 2019, but the Fund stopped the disbursement of about$ 3bn when the former government reneged on its commitments.
