ISLAMABAD: cash-strapped Pakistan has blamed geopolitics for the International Monetary Fund (IMF) of reluctance to revive a stalled bailout program, claiming that global institutions wanted Pakistan to default on its sovereign debt, as Sri Lankaand then enter into negotiations with the global lender.
Addressing a parliamentary finance and revenue committee, Pakistan’s finance minister ishaq dar he said that the IMF’s demand for a $6 billion guarantee on external resources was not justified and that the IMF’s delay plan apparently suggested a political agenda.
“Geopolitics are behind a halted loan program for Pakistan to default. Hostile foreign elements want Pakistan to become another Sri Lanka and then the IMF negotiates with Islamabad,” Dar said.
Responding to the IMF’s objection to the tax breaks granted in the recently revealed budget, the minister said that Pakistan is a sovereign country and cannot accept everything from the IMF. As a sovereign country, according to Dar, Pakistan should be entitled to grant some tax concessions. “The IMF wants us to not give tax concessions in any sector,” he added. The minister stressed that the country would meet its obligations with or without the IMF rescue package.
He said the IMF had given no reason for the “unnecessary delay” behind the (current) ninth review, which has been pending since last November. “IMF or no IMF, Pakistan will not default,” he added.
“The tax exemptions that have been announced in the Budget are growth triggers in the real sectors of the economy. This is the sustainable way to provide employment and sustenance to the common citizen. In any case, the amount is quite small,” said a Pakistani Finance Ministry statement in response to IMF criticism.
With the IMF’s $6.7 billion EFF (extended funds facility) for Pakistan set to expire on June 30, the federal budget unveiled earlier this month was the last hope for the incumbent government to lay the groundwork for revival. of the IMF program and the reimbursement of a $1.2 billion fee, part of the $6.7 billion rescue package. It didn’t take long for the IMF to raise serious objections against the 2023-24 budget. He said the government has missed the opportunity to broaden the tax base and reduce tax expenditures, as well as the terms of tax amnesty against the conditionality of the IMF program. Looking for major changes to the budget, the Washington-based lender has stated that it is ready to refine this budget before it is passed by Parliament.
However, it seems unrealistic for the Pakistani authorities to redraft the budget, cut more subsidies and raise more taxes, and that too in a fortnight.
Without the IMF properly on board, the chances of other countries such as China, Saudi Arabia and the United Arab Emirates intervening are also slim, as all of them have made that abundantly clear in recent months.
However, Pakistan’s foreign exchange reserves are known to drop to $2.6 billion after a $900 million payment to creditors at the end of the month, just as the EFF is scheduled to end, that too if China helps by reinvesting $ 2.3 billion of its deposits. That’s less than two months of import coverage and about 10 times less than the $23 billion owed in a fiscal year.
Addressing a parliamentary finance and revenue committee, Pakistan’s finance minister ishaq dar he said that the IMF’s demand for a $6 billion guarantee on external resources was not justified and that the IMF’s delay plan apparently suggested a political agenda.
“Geopolitics are behind a halted loan program for Pakistan to default. Hostile foreign elements want Pakistan to become another Sri Lanka and then the IMF negotiates with Islamabad,” Dar said.
Responding to the IMF’s objection to the tax breaks granted in the recently revealed budget, the minister said that Pakistan is a sovereign country and cannot accept everything from the IMF. As a sovereign country, according to Dar, Pakistan should be entitled to grant some tax concessions. “The IMF wants us to not give tax concessions in any sector,” he added. The minister stressed that the country would meet its obligations with or without the IMF rescue package.
He said the IMF had given no reason for the “unnecessary delay” behind the (current) ninth review, which has been pending since last November. “IMF or no IMF, Pakistan will not default,” he added.
“The tax exemptions that have been announced in the Budget are growth triggers in the real sectors of the economy. This is the sustainable way to provide employment and sustenance to the common citizen. In any case, the amount is quite small,” said a Pakistani Finance Ministry statement in response to IMF criticism.
With the IMF’s $6.7 billion EFF (extended funds facility) for Pakistan set to expire on June 30, the federal budget unveiled earlier this month was the last hope for the incumbent government to lay the groundwork for revival. of the IMF program and the reimbursement of a $1.2 billion fee, part of the $6.7 billion rescue package. It didn’t take long for the IMF to raise serious objections against the 2023-24 budget. He said the government has missed the opportunity to broaden the tax base and reduce tax expenditures, as well as the terms of tax amnesty against the conditionality of the IMF program. Looking for major changes to the budget, the Washington-based lender has stated that it is ready to refine this budget before it is passed by Parliament.
However, it seems unrealistic for the Pakistani authorities to redraft the budget, cut more subsidies and raise more taxes, and that too in a fortnight.
Without the IMF properly on board, the chances of other countries such as China, Saudi Arabia and the United Arab Emirates intervening are also slim, as all of them have made that abundantly clear in recent months.
However, Pakistan’s foreign exchange reserves are known to drop to $2.6 billion after a $900 million payment to creditors at the end of the month, just as the EFF is scheduled to end, that too if China helps by reinvesting $ 2.3 billion of its deposits. That’s less than two months of import coverage and about 10 times less than the $23 billion owed in a fiscal year.
Discover more from PressNewsAgency
Subscribe to get the latest posts sent to your email.