New govt will first renegotiate IMF programme, says PML-N's Miftah Ismail

Khalid Mustafa

April 02, 2022

PML-N leader and former finance minister Miftah Ismail. — Facebook/File

Pakistan’s new finance minister will hold a meeting with IMF on April 18 in Washington, says PML-N leader.
New govt will ask IMF to provide remaining $3bn to Pakistan in next six months, Miftah Ismail says.
"The new govt headed by Shahbaz Sharif will make a visible difference to pull the country out of the economic mess,” PML-N leader assures.

ISLAMABAD: With all eyes on the outcome of the no-confidence motion, the Opposition leaders seem to be confident about their aim to oust the PTI government as they started planning their administrative actions after coming into power.

In an exclusive interview with The News, former finance minister Miftah Ismail said that the next government under the leadership of PML-N President Shahbaz Sharif will first renegotiate Pakistan's $6 billion International Monetary Fund (IMF) programme — which is currently hanging in balance in the wake of the relief package announced by Prime Minister Imran Khan.

Sharing details of their plan, Ismail — who might get appointed as the finance minister of the new government — said that they will ask the IMF to provide the remaining $3 billion to Pakistan in the next six months.

“Pakistan’s finance minister of the new government will hold a meeting with IMF functionaries on April 18 in Washington for the revival of the $6 billion programmes to get the remaining amount of $3 billion in the next six months to help stabilise the fast-depleting reserves and ensure smooth financial supplies from other donor agencies,” he said, confident enough that the Opposition will oust the premiere tomorrow.

So far, the IMF has provided $3 billion to Pakistan out of $6 billion. The new government will also go for the review of the programme, seeking softening terms and conditions to get the country out of the economic morass and provide maximum solace to the countrymen.

He said there is a vast difference between Shahbaz Sharif and Imran Khan Niazi. “Shahbaz is the person who believes in work, work and work, and he delivered well in the past being the Punjab chief minister whereas Imran Khan believes in just talking and walking.”

“The new government headed by Shahbaz Sharif will make a visible difference and pull the country out of the economic mess,” he said, adding that the IMF programme currently hangs in balance because of the relief package and second amnesty scheme announced by Imran Khan-led government.

The former finance minister further said that PM Imran Khan first announced the amnesty scheme for the real estate sector to “benefit his friends” and now announced the same for the industrial sector, knowing the fact that Pakistan is still under the Financial Action Task Force (FATF) watch.

IMF’s response

It is worth mentioning that the seventh review between Pakistan and the IMF remained inconclusive as the former failed to convince the Fund over the relief measures announced by PM Imran Khan.

However, talking to The News, IMF’s Representative in Pakistan Esther Perez Ruiz said after the completion of the sixth review, the IMF staff and Pakistani authorities were further discussing existing policies and new initiatives that would promote economic stability in Pakistan amidst a challenging external environment in the context of the Russia-Ukraine war.

“This engagement remains constructive,” Ruiz added.

'Best-ever governance'

Shedding light on the depleting foreign exchange reserves, he said Pakistan’s reserves alarmingly went down by $4.3 billion in March and $2.9 billion in the last week.

“Though there is less room to manoeuvre given the fiscal position of the country for the next government and undertake immediate steps to provide relief to the masses, the new government will leave no stone unturned to relieve the masses who have been facing high inflation in the last three and a half years,” he said.

Promising to deliver what is being vowed, Ismail said: “We will introduce the best-ever governance and restore the smooth supply chain of kitchen items that include sugar, atta (wheat), edible oil, milk and vegetables.

“The PTI government has laid down mines for the next government, but InshaAllah the next government will overcome all fiscal woes.”

'Main cause of inflation'

Regarding rupee-dollar parity, Ismail said the Pakistani rupee has depreciated to its lowest ebb against the US dollar.

“This is the main cause of inflation in the country that needs to be addressed,” he said in light of the current value of the local currency that closed at Rs184.09 in the interbank market and Rs186 in the open market on Friday.

He said the country’s economy is “bleeding” with circular debt in the power sector that has risen to Rs2.8 trillion. And the circular debt in the gas sector has gone up to Rs 650 billion with receivables of the Pakistan State Oil (PSO) hiking to over Rs500 billion.

'New govt will ensure electricity supply at lower rates'

He said PML-N supremo Nawaz Sharif, in his last tenure, had added 12,000MW to the national grid, but because of the incompetent PTI government, the country is facing a 5,400MW reduction in power generation.

“People are facing power outages because of the non-availability of the required fuel stock. The new government will prefer to ensure the electricity supply to the industrial sector at lower rates than in India, Sri Lanka and Bangladesh,” he said.

He promised that the new government would first restore the fuel supply to the power sector so that people get an uninterrupted electricity supply in summer.

He pointed out that this government has not taken timely steps to ensure furnace oil, coal and gas for power generation in the country, keeping in view the increasing demand for electricity on account of surging mercury.

“The wheat production remained short of target because of inadequate PTI government policies and the government had to import wheat, knowing the fact that its price has increased in the global market mainly in the wake of the Russian-Ukraine war.

“Urea was not made available to farmers despite its super production. The PTI government helped its unscrupulous ‘friends’ to smuggle out urea for windfall profits,” he said, highlighting the shortcomings of the PTI-led government.

He said the next government would focus on more government-to-government gas supply contracts to ensure the smooth supply of LNG in the country.

With additional input from Mehtab Haider