By Staff Reporter
ISLAMABAD: In a last-ditch bid to iron out differences over budgetary numbers, Pakistan and IMF officials butted heads through Friday evening to reach a middle-ground amid expectations of a “breakthrough” within next 72 hours.
The government took the toughest ever measures to end fuel subsidies and hiked the petroleum prices up to unprecedented levels to win a nearly lost IMF loan programme.
However, the IMF is still insisting upon ‘doing more’ knowingly that Islamabad is “desperate” as its foreign currency reserves have eroded to dangerous levels.
Sources confirmed to IP (Independent Pakistan) on Friday evening that the IMF staff was yet to share the first draft of the Memorandum of Financial and Economic Policies (MEFP) with Pakistani authorities. Pakistan and the IMF officials are also scheduled to meet on Saturday (today) to move toward the desired objectives.
Sharing of draft MEFP is a prerequisite for moving towards the signing of the staff-level agreement as it provides a basis of a framework on which both sides evolve consensus and then this document, signed duly by the finance minister and governor central bank, is forwarded to the IMF’s Executive Board for seeking approval for completion of pending review and release of next tranche.
One top official disclosed that Minister for Finance Miftah Ismail held a virtual meeting with the IMF’s Mission Chief. This meeting was also attended by the Director IMF, dealing with Pakistan on Friday evening and both sides made some “progress” for evolving consensus on MEFP.
A top Finance Division official said the Minister for Finance and Minister of State for Finance held a meeting with US Ambassador on Thursday but it would not be sufficient as Islamabad would have to establish “contacts” with US Treasury high-ups to muster up the required support after evolving consensus on the framework on the basis of which both sides could make progress for signing MEFP document.
“Without broader agreement on the basis of framework, no one would help Pakistan,” said the official.
He said after reaching an agreement on the framework, Washington’s help could be sought on one or two critical outstanding issues between the two sides.
He said in case of a stalemate in reaching a consensus on exact parity of exchange rate, the influence of key countries such as the US or EU could be sought.
The outstanding issues between the two sides included revised rates on rates of Personal Income Tax (PIT) for salaried class, projection of petroleum levy to Rs750 billion, calculation of power sector as well as Utility Stores Corporation (USC) subsidies for the budget for next fiscal.
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