Cash-strapped Pakistan and the IMF have kicked off the much-awaited loan review talks for the release of the $710 million second tranche of a $3 billion bailout package on a generally positive note.
Caretaker Finance Minister Dr Shamshad Akhtar and the International Monetary Fund’s (IMF) mission chief for Pakistan, Nathan Porter, led their sides to the opening round of two-week-long negotiations to discuss the next tranche based on Pakistan’s performance in the first quarter that started in July.
Porter “appreciated the government’s commitment” to meeting the first-quarter targets, the Ministry of Finance said in a statement after the meeting, which has set the stage for a deep dive into forward-looking reforms under a nine-month bailout package, slated to be completed in March next year.
He also “commended the government’s efforts and measures taken in some critical areas” and underscored the importance of continuing these efforts to stay on track for ensuring the country’s economic stability, the ministry said.Porter inquired the Pakistani authorities about the next general elections and the functioning of the Special Investment Facilitation Council — the two most crucial issues that affected the country’s political and economic landscapes.
Hours after the IMF-Pakistan opening session on Thursday, it was announced that Pakistan’s general elections will be held on February 8, ending uncertainty over the much-awaited polls in the cash-strapped country.
The announcement came after the election commission officials met President Arif Alvi at the directives of the Supreme Court.
The clarity on the election date will strengthen the hands of the Ministry of Finance during the negotiations, although the IMF has not explicitly attached any such condition.
The meeting was attended by IMF’s resident representative in Islamabad, Esther Perez Ruiz, State Bank Governor Jameel Ahmed, Federal Board of Revenue (FBR) Chairman Amjed Zubair Tiwana, Securities and Exchange Commission of Pakistan Chairman Akif Saeed, Finance Secretary Imdadullah Bosal, senior finance ministry officials and several IMF delegates.
Akhtar reported Pakistan’s official position on the progress made so far on the $3 billion short-term loan agreement — called the Standby Arrangement (SBA) — and explained the fiscal measures being taken to improve the economic situation.
These measures included a tight control on expenditures, both in terms of restricting the development programme and reducing subsidies and provincial fiscal controls, more than the programme’s requirements for the first quarter of the fiscal year, resulting in higher-than-targeted primary surplus and non-revenue collections.
The finance minister and other members of her team also held discussions with the visiting team on overall comprehensive reforms and the measures undertaken by the FBR, resulting in higher-than-targeted revenue collections, not only at the end of the first quarter but even in October, the first month of the second quarter.