To meet the economic needs, Pakistan has used the International Monetary Fund (IMF).The IMF) to finalize a new long-term agreement with Regarding this agreement, Prime Minister Shehbaz Sharif has said that if all the agreed targets are achieved, ‘this will be the last IMF package in the history of Pakistan.’
The final tranche of the standby agreement with the IMF was negotiated in Washington in April this year, after which the final tranche of the short-lived package was approved. In the same meeting, discussions on a new loan program were also started with the IMF, after which a delegation of the IMF mission came to Pakistan in mid-May, in which discussions on a new loan program were held but could not be completed. .
After that, the IM delegation said in its statement that ‘the IMF mission and the Pakistani authorities will continue the process of negotiations, the aim of which is to finalize the talks.’
According to information available to Independent Urdu, three days in the Senate Committee on Finance from June 20 Budget There will be a debate, after which the report of the committee will be presented in the Senate. Then the Senate will send its recommendations to the National Assembly and after that the process of approval of the budget will start in the National Assembly and the President of Pakistan will sign it before June 30 after approval from the National Assembly.
According to Shakeel Ahmed, a journalist who covers issues related to economy and trade, the new financial year will start from July 1, after which the final negotiations on the new bailout package will be held with the IMF.
What are the features of this long-term program and when is it expected to be approved, Independent Urdu has tried to know in this regard.
What are the conditions for the new IMF bailout package?
In March this year, the IMF issued a five-condition declaration for a new long-term agreement, which said that negotiations on the new program will begin in the coming months, but Pakistan must work towards certain targets. It will happen.’
The first goal in this regard is that Pakistan will have to strengthen its treasury, for which Tax The collection system has to be improved and the tax base has to be increased.
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Another goal is to reform the energy sector. In this regard, the IMF has four demands. Firstly, the power transmission and distribution system should be improved. Secondly, the demand of captive power i.e. private power plants should be transferred to the national grid. Thirdly, reforms should be brought in electricity distribution companies and fourthly, electricity theft should be eliminated.
The third and fourth targets are related to inflation and exchange rate. The International Monetary Fund has called for inflation to be brought back to the target in a statement and said that the exchange rate should be maintained in a transparent manner.
The fifth goal is to increase private business activities and privatize state-owned enterprises.
Journalist Shehbaz Rana, an expert in economic affairs, told Independent Urdu that ‘Increasing tax collections is the main focus of the IMF. Repatriation of tax-exempt sectors, recovery in the energy sector, increase in gas and electricity tariffs are also included in the IMF conditions.
He added: ‘The agreement on the new bailout package is yet to be finalised, but it is expected that a staff-level agreement will be in place soon after the budget is approved.’
Journalist Shakeel Ahmad told Independent Urdu that ‘as soon as the budget is approved, then the staff level agreement of the new IMF program is expected to be approved, because the budget that has been made for the fiscal year 2024-25 is the IMF. made in accordance with the terms of F.’
He further said that the IMF had asked the government of Pakistan to increase taxes, after which the government has set a target of 12 thousand 970 billion rupees in the new budget. Compared to last year, 3800 billion rupees additional taxes will be collected in the budget of this financial year.
According to Shakeel Ahmed: ‘The IMF will now review whether the budget is in accordance with their conditions or not, after that progress will be made on the staff level agreement.’
The federal budget for the fiscal year 2024-25, presented on June 12, proposed hikes in taxes on other sectors besides heavy taxes on the salaried class, which critics termed as a ‘tax budget’.
In this regard, in a statement on June 18 Finance Minister Muhammad Aurangzeb had said that ‘hospitals and schools can be run by charity, but the whole system of the country is run by taxes.’
On the other hand, Finance Minister Muhammad Aurangzeb expressed hope in a statement last month that a staff-level agreement on a new loan from the IMF could be reached by June or early July this year, but he clearly did not. It was said that what will be the size and duration of the new loan.
The finance minister has said that there are two reasons for starting talks with the IMF on a new long-term loan program, one of which is economic stability and the other is the implementation of the economic reform agenda.
#reforms #Pakistan #loan #IMF
2024-08-10 00:36:53
