Islamabad: Pakistan has sought the support of the United States for the revival of International Monetary Fund The program as a global lender has yet to agree to an employee-level agreement, despite claims the federal government has made several difficult decisions, according to a media report on Friday.
The economic team of the Pakistani government met the US ambassador Donald Blom Here and seeking Washington’s support and acceptance of the actions taken so far, The Express Tribune newspaper quoted at least two people familiar with the discussion.
Finance Minister miftah ismail The report said that Dr Ayesha Pasha, the Minister of State for Finance, met with the US envoy to garner Washington’s support.
America, which is the largest shareholder in International Monetary FundHas played a catalytic role in Islamabad in completing the fund’s program review in the past.
Sources said Blom was apprised of the measures taken to revive the program and bring stability to the economy.
The US ambassador was informed that the government has proposed fiscal consolidation equal to 2.2 per cent of the country’s GDP, despite challenging times.
Sources said that if there is no breakthrough in the next few days, the finance secretary and finance minister may move to the US to meet the top management of the IMF.
The finance ministry did not officially comment on the article.
According to sources, despite three main rounds of talks, which involve the two incumbent government and several virtual contacts, the IMF did not share the draft Memorandum of Understanding (MEFP) with Pakistan till Thursday afternoon.
The MEFP forms the basis of any employee level agreement and no formal employee level agreement can be signed without finalizing the MEFP.
The Pakistan-IMF program has been derailed since March this year after the previous government went back on its commitments.
The meeting between Pakistani and US officials came on a day the IMF clarified its position on its demand to link energy payments to Chinese independent power producers with the non-China-Pakistan Economic Corridor.CPEC) projects were extended to the government last year.
The global lender is said to have asked the government to treat Chinese CPEC power plants with power plants installed under the 1994 and 2002 power policies, The Express Tribune had earlier said in a detailed report.
“IMF asked Pakistan not to renegotiate CEPC IPP contracts. These claims are simply untrue”, according to a statement from the IMF attributed to its resident representative, Esther Perez.
Pakistan owes about 300 billion rupees to Chinese IPPs and the IMF keeps track of every payment made to them.
So far, 11 Chinese IPPs installed with an investment of $10.2 billion are operational, with a total generation capacity of 5,320 MW.
Among them, about 2,000 MW of power plants were shut down due to shortfall in imported coal inventories.
A senior Pakistani interlocutor said that the government is making every effort to revive the IMF program and has taken several unpopular steps, but still falls short of the IMF’s expectations.
Pakistan’s government on Wednesday raised fuel prices by up to 29 percent, scrapped fuel subsidies in an effort to narrow the fiscal deficit and garner significant support from the IMF for a cash-strapped economy.
However, the IMF was not happy with some of the other measures announced in the budget on June 10, including those about giving tax relief to the salaried people, the report said.
The Coalition government hoped that the IMF might agree to reach an employee-level agreement, after initiating the process to approve an increase in the prices of petroleum products and electricity prices.
However, the IMF not only wants to reverse the cut in income tax rates for the salaried class, but also wants to put an additional burden of Rs 125 billion on the salaried people.
Sources said the government is now working on a new proposal that includes withdrawing the tax relief of Rs 47 billion and then putting an additional burden of Rs 18 billion on the salaried class.
Minister of State for Finance Dr Ayesha Pasha while talking to the media after the meeting of Minister of State for Finance Dr Ayesha Pasha said that now there was more clarity for the IMF on the new budget, according to the paper an agreement is expected to be signed soon.
The economic team of the Pakistani government met the US ambassador Donald Blom Here and seeking Washington’s support and acceptance of the actions taken so far, The Express Tribune newspaper quoted at least two people familiar with the discussion.
Finance Minister miftah ismail The report said that Dr Ayesha Pasha, the Minister of State for Finance, met with the US envoy to garner Washington’s support.
America, which is the largest shareholder in International Monetary FundHas played a catalytic role in Islamabad in completing the fund’s program review in the past.
Sources said Blom was apprised of the measures taken to revive the program and bring stability to the economy.
The US ambassador was informed that the government has proposed fiscal consolidation equal to 2.2 per cent of the country’s GDP, despite challenging times.
Sources said that if there is no breakthrough in the next few days, the finance secretary and finance minister may move to the US to meet the top management of the IMF.
The finance ministry did not officially comment on the article.
According to sources, despite three main rounds of talks, which involve the two incumbent government and several virtual contacts, the IMF did not share the draft Memorandum of Understanding (MEFP) with Pakistan till Thursday afternoon.
The MEFP forms the basis of any employee level agreement and no formal employee level agreement can be signed without finalizing the MEFP.
The Pakistan-IMF program has been derailed since March this year after the previous government went back on its commitments.
The meeting between Pakistani and US officials came on a day the IMF clarified its position on its demand to link energy payments to Chinese independent power producers with the non-China-Pakistan Economic Corridor.CPEC) projects were extended to the government last year.
The global lender is said to have asked the government to treat Chinese CPEC power plants with power plants installed under the 1994 and 2002 power policies, The Express Tribune had earlier said in a detailed report.
“IMF asked Pakistan not to renegotiate CEPC IPP contracts. These claims are simply untrue”, according to a statement from the IMF attributed to its resident representative, Esther Perez.
Pakistan owes about 300 billion rupees to Chinese IPPs and the IMF keeps track of every payment made to them.
So far, 11 Chinese IPPs installed with an investment of $10.2 billion are operational, with a total generation capacity of 5,320 MW.
Among them, about 2,000 MW of power plants were shut down due to shortfall in imported coal inventories.
A senior Pakistani interlocutor said that the government is making every effort to revive the IMF program and has taken several unpopular steps, but still falls short of the IMF’s expectations.
Pakistan’s government on Wednesday raised fuel prices by up to 29 percent, scrapped fuel subsidies in an effort to narrow the fiscal deficit and garner significant support from the IMF for a cash-strapped economy.
However, the IMF was not happy with some of the other measures announced in the budget on June 10, including those about giving tax relief to the salaried people, the report said.
The Coalition government hoped that the IMF might agree to reach an employee-level agreement, after initiating the process to approve an increase in the prices of petroleum products and electricity prices.
However, the IMF not only wants to reverse the cut in income tax rates for the salaried class, but also wants to put an additional burden of Rs 125 billion on the salaried people.
Sources said the government is now working on a new proposal that includes withdrawing the tax relief of Rs 47 billion and then putting an additional burden of Rs 18 billion on the salaried class.
Minister of State for Finance Dr Ayesha Pasha while talking to the media after the meeting of Minister of State for Finance Dr Ayesha Pasha said that now there was more clarity for the IMF on the new budget, according to the paper an agreement is expected to be signed soon.