No bail out package for Pakistan unless pre-conditions are implemented: IMF

BUSINESS

ISLAMABAD: Pakistan has approached International Monetary Fund (IMF) for a bail out package to prop up its sinking economy.

The IMF has however made it clear that it will not extend any bail out package to  Pakistan unless its conditions  and comprehensive reforms agenda is implemented.

Finance ministry sources said the care taker fiancé minister Shamshad Akhtar had talked to IMF authorities in this respect. As the caretaker government  is not authorized to execute important agreement like this besides taking any policy decision therefore, the care taker finance minister will evolve comprehensive recommendations before completion of her tenure for the coming government.

Sources said IMF has been approached for a bail out package in connection with acquisition of new loans, repayment of foreign debt and fortification of national economy.
The IMF has during initial consultations has handed over a list of reforms to Pakistan authorities.
It will be a formidable challenge for the government to be installed in August 2018 after polls to implement IMF pre-conditions because IMF has refused to give any bail out package to Pakistan without implementation of these conditions.

Most of the conditions on the basis of which loan was provided to Pakistan in the past were not enforced.  Now IMF has demanded in advance that tariff of gas and electricity be scaled up, tax net be broadened through tax reforms, tax recoveries be enhanced, rupee should be devalued more and it should be brought at original level, power distribution companies be privatized and line losses be reduced to nil.

According to sources Pakistan has been asked through IMF independent evaluation office report  to introduce  infra structural reforms before opting for new program.

IMF has also asked Pakistan to make better use of funds rather than spending it in luxuries.

Pakistan has also been asked to accomplish incomplete agenda of extending  the scope of GST, slapping  tax on agriculture sector and elimination of subsidies.