Business

IMF to ‘remain engaged’ with Pakistan despite political tumult

Published

2 years ago

Farwa

“Pakistan authorities have committed not to introduce fuel cross-subsidy,” IMF says.
Fund says it sees no indication that Pakistan wants to pause negotiations.
Political crisis in the wake of Imran Khan’s arrest have sparked concerns about IMF programme.

Amid speculations that Pakistan’s chances of clinching a long-suspended International Monetary Fund (IMF) bailout have been reduced due to the political situation, the lender clarified that it “remains engaged” with Islamabad, Bloomberg reported Thursday.

Declining to comment on the arrest of former prime minister Imran Khan, the spokesperson of the global lender said: “IMF remains engaged with Pakistan on securing funding and policy assurances with the goal of reaching an agreement on the ninth review of the $6.7 billion loan agreed in 2019.”

“The IMF sees no indication that Pakistan wants to pause negotiations on disbursement from the current programme,” the spokesperson told the foreign publication.

Following the arrest of the Pakistan Tehreek-e-Insaf (PTI) chairman, concerns sparked that Pakistan was edging closer to a default as political unrest will delay an IMF bailout.

“It looks increasingly difficult for Pakistan to avoid a default in the absence of fresh funding support coming in,” said Eng Tat Low, an emerging-market sovereign analyst at Columbia Threadneedle Investments in Singapore.

“I am also growing more skeptical whether an IMF deal is going to come through. Their heavy debt amortisation against precarious reserves would suggest default is imminent,” he added.

Violent protests erupted in Pakistan on Tuesday with dozens injured across several cities and demonstrators attacking military buildings after Khan was arrested. Moreover, the police initiated a crackdown and arrested the top leadership of the party along with thousands of workers.

The rupee slumped to a record low and slid over 3% a dollar on Thursday. Dollar bonds due 2031 fell to the lowest since November and were indicated at 33.10 cents on the dollar.

‘No petrol subsidy’

Moreover, the Fund also revealed that Pakistani authorities have committed to the lender that petrol subsidy would not be introduced.

“Pakistan authorities have committed not to introduce fuel cross-subsidy scheme in F23 [fiscal year 2022-23] and beyond,” the spokesperson said.

The statement comes as a surprise as Minister of State for Petroleum Dr Musadik Malik, on Tuesday, said that Pakistan aims to address IMF’s concerns before implementing its new fuel subsidy plan.

“The IMF had some reservations about the government’s plan to raise fuel prices for wealthier motorists to finance a subsidy for lower-income people”, he said on Bloomberg TV in an interview.

Malik said: “We originally thought that it was a much simpler idea. We want to make sure now that if we move forward, we take care of their concerns and make sure that they completely understand what we are trying to do and why.”

However, the Washington-based lender has now said that Pakistan has already committed to the Fund that it would not introduce the subsidy.

Business

SFD and Pakistan Sign Two Deals Totaling $1.61BLN

Published

1 day ago

Farwa

Two agreements totaling $1.61 billion have been inked by Pakistan and the Saudi Fund for Development to improve their bilateral economic cooperation.

Business

Saudi Arabia and Pakistan sign an MOU to strengthen their auditing industry collaboration.

Published

1 day ago

Farwa

A spokesperson for the office of the Auditor-General of Pakistan (AGP) announced on Monday that the two countries have signed a Memorandum of Understanding (MoU) to strengthen cooperation in public sector auditing through improved cooperation between audit institutions of both countries, as well as training programs and the exchange of trainers.

This comes as a group from Saudi Arabia’s General Court of Audit (GCA), headed by GCA President Dr. Hussam bin Abdulmohsen Alangari, arrived in Pakistan on Sunday for a four-day visit.

The agreement was signed during AGP Muhammad Ajmal Gondal’s meeting with the Saudi delegates, aiming to strengthen audit cooperation, enhance knowledge-sharing, and improve governance, transparency and accountability in government spending.

Public relations officer Muhammad Raza Irfan of the AGP’s office told Arab News that the deal will further advance bilateral collaboration between Saudi Arabia and Pakistan in addition to enhancing professional ties between the two nations’ auditing institutions.

In a statement released from his office, AGP Gondal was cited as saying, “This collaboration marks a significant step toward fostering international cooperation in auditing.”

“The exchange of ideas and methodologies will undoubtedly strengthen our capacity to meet emerging challenges and set new benchmarks for public accountability.”

Discussions at Monday’s meeting focused on fostering closer ties between the Supreme Audit Institutions (SAIs) of Pakistan and Saudi Arabia, sharing innovative audit methodologies, and planning collaborative initiatives for the future, according to the AGP office.

The two parties decided to increase their knowledge of theme, environmental, and impact audits as well as to exchange best practices in audit standards, performance audits, and citizen participation audits.

The statement added, “It also agreed to exchange trainers, address new auditing challenges, plan cooperative audits, including a performance audit on the oil and gas sector in 2025, and work together on training programs.”

Both sides reaffirmed their shared commitment to promoting transparency, accountability and excellence in public sector auditing.

Business

The government chooses to continue the PIA privatization process.

Published

1 day ago

Farwa

The Pakistan International Airlines (PIA) privatization process will be restarted by the federal government, and expressions of interest would be requested within the month. Officials stated that the Prime Minister’s Committee on Privatization will convene to make the final decision.

Usman Bajwa, the secretary of the Privatization Commission, gave a briefing on the updated procedure to the National Assembly Standing Committee on Privatization. Additionally, he disclosed that airlines other than PIA are now able to compete with regional carriers thanks to IMF-approved aircraft tax concessions.

Farooq Sattar, the chairman of the privatization committee, underlined the importance of giving PIA workers at least five years of job security. Employee protection will continue to be a top priority and will be resolved prior to bidding, the Privatization Commission promised.

PIA’s liabilities totaling Rs650 billion have already been assumed by the government, and an additional Rs45 billion in outstanding debts must be paid before the privatization process can begin. As of the now, PIA has assets around Rs155 billion and liabilities worth Rs200 billion. It will be necessary for the new buyer to expand the fleet by 15 to 20 aircraft.

Additionally, the Privatization Committee has sought a timeline for the privatization of Faisalabad, Gujranwala, and Islamabad Electric Supply Companies. Officials stated that after the appointment of a financial advisor, the privatization process for these companies will accelerate.