ISLAMABAD: The Senate Standing Committee on Finance and Revenue was on Thursday informed that the caretaker government would begin talks with the International Monetary Fund on the quarterly review of the $3bn Standby Arrangement next month, the panel’s chairman, Saleem Mandviwala, said.
In July, the IMF executive board had approved the much-needed nine-month SBA with Pakistan “to support its economic stabilisation programme”. The approval had allowed for an immediate disbursement of $1.2bn, with the rest to be phased over the programme’s duration — subject to two quarterly reviews.
The second quarterly review under the SBA, due in October, would be based on end-September data that would secure the disbursement of about $710 million worth of the second tranche in December.
The IMF had made it clear while signing the SBA that given the challenges, the new SBA would provide a policy anchor and a framework for financial support from multilateral and bilateral partners in the period ahead but had warned that “the full and timely implementation of the programme will be critical for its success in light of the difficult challenges”.
Last month, Finance Minister Shamshad Akhtar had an introductory virtual engagement with the staff mission of the global lender and was reported to have promised steadfast implementation of the policy actions committed under the SBA during the tenure of the caretaker government to ensure economic stability.
In his visit to New York last week for the United Nations General Assembly, Prime Minister Anwaarul Haq Kakar also met IMF chief Kristalina Georgieva. During their engagement, the head of the global lender urged PM Kakar to “tax the rich and protect the poor”. Meanwhile, the premier characterised the meeting as constructive, which focused on mutual commitments.
During the in camera Senate committee meeting today, Shamshad told the Senate committee that the IMF review would begin next month, according to PPP’s Mandviwala.
“She said a review was held in every quarter,” he said.
“The finance minister told the panel inflation was declining but the only threat to the government was an increase in petrol prices, which she stated would mess up the plan,” Mandviwala said.
Shamshad, he continued, also stressed the need for a charter of economy and highlighted that politicians should develop a consensus.
“She said all the political parties should work together on the economy, adding that politicians, not caretakers could solve these problems.”
Furthermore, she told the committee that the government was now seriously working on privatisation and outsourcing of public entities, including electricity distribution companies, the PPP senator added.
