Imran takes ruling alliance into confidence on IMF deal

Tariq Butt

Prime Minister Imran Khan has taken parliamentarians of the ruling Pakistan Tehreek-i-Insaf (PTI) and its allies into confidence on the $6 billion bailout package finalised with the International Monetary Fund (IMF) and overall economic policies of the government.

On the other hand, the opposition demanded that the government apprise parliament of the agreement made with the IMF.

During a meeting chaired by the prime minister, the PTI parliamentarians and its allies were briefed by Adviser to the Prime Minister on Finance Dr Hafeez Shaikh on the IMF deal.

Special Assistant to the premier on Information Dr Firdous Ashiq Awan said the prime minister wanted to apprise the parliamentarians of the ruling party on the current economic situation before the coming federal budget.

She said the prime minister had also urged the PTI lawmakers to give more time to their constituencies and regularly visit markets and keep an eye on the prices of essential items during Ramadan.

“The main focus of the prime minister was on how to alleviate the sufferings of the common man,” she added.

Awan claimed that the government had put the economy on the right track and the sufferings of the people were temporary. She said the parliamentarians of the ruling alliance had shown complete confidence in the policies of the government and the prime minister.

Earlier, Dr Shaikh said Pakistan would receive $6bn under the IMF programme over a period of three years. He said the agreement between the government and the IMF would be approved by the latter’s board, adding that the IMF was an international institution whose primary job was to assist member countries facing economic difficulties.

He said the conditions set by the IMF were also in favour of Pakistan that how the country could curtail its expanses and liabilities and improve its economy.

Dr Shaikh said the government was focused on not placing too much burden on the common man, adding that if power tariff was increased under the IMF programme, it would not affect 75 per cent consumers using less than 300 units of electricity.

“Under the programme, the government is also allocating an additional Rs80 billion for social safety programmes like Ehsaas and the Benazir Income Support Programme in order to minimise the burden on the common man,” he said.

Distinguished economist and former finance minister Dr Hafeez Pasha says the IMF statement following the staff level agreement on $6 billion loan programme with Pakistan, indicates that its Executive Board will approve the facility only after the Financial Action Task Force (FATF) clears Pakistan from anti-money laundering and terror financing charges.

He mentioned a specific reference in the IMF release, which asked the government of Pakistan to show commitment against money laundering and terror financing, meaning thereby that FATF clearance is mandatory to qualify for the programme.

The FATF is scheduled to be held in Beijing from May 15 to May 17 and will minutely examine Pakistan’s compliance report on total 19 points, including risk assessment to currency smuggling for money-laundering and terror-financing through cash couriers.

The IMF executive board, where US is the major shareholder of the total fund which is 16.52 per cent and has the voting power of 831,407, will go through the staff level agreement with Pakistan and will give their final nod. The board will approve the loan after keeping in view the FATF report about Pakistan on money-laundering and terror-financing conditions of the Fund that the government of Pakistan has accepted.

Dr Pasha argued in the first three months Pakistan will be groping in the dark and will have no tranche after the agreement as the instalments will start after three months provided Islamabad fulfills all the prior actions.

He said it is basically not $6 billion loan, instead it is $3 billion as Pakistan has to pay back to IMF $3 billion loan in next three years. The amount is meager and is not enough to help Pakistan bridge the financing gap.

Astonishingly the IMF is not ready to roll over its loan, but it has asked Pakistan in the press release to ask its international development partners to rollover their loans.