IMF demands ‘do more’, enhance transparency in Pakistan

The International Monetary Fund (IMF) has intensified its demands on Pakistan to ‘do more’ and enhance transparency within government institutions as part of negotiations for a new bailout package. Despite Pakistan fulfilling its strict conditions in the new budget, the IMF still demands it to ‘do more’. The IMF’s stringent conditions include pushing for a 45% tax on agricultural income and abolishing exemptions for the livestock sector, sources reveal. Despite Pakistan’s efforts to privatize profitable state-owned enterprises, challenges have arisen in selling shares to Gulf countries due to IMF objections against government-level sales. According to sources, the IMF has raised concerns about exemptions under the Privatization Commission Ordinance, PPRA laws, and SOEs law in the sale of shares. Recently, the government transferred ownership and assets of seven profitable enterprises to the Sovereign Wealth Fund. Entities involved include OGDCL, PPL, Mauri Petroleum, National Bank, Pakistan Development Fund, Government Holdings, and Neelum Jhelum Hydropower Company. Finance Ministry officials emphasized that the potential sale of shares aims to generate resources for new investment projects. The stringent IMF demands and ongoing negotiations underscore the financial challenges and reform pressures facing Pakistan’s government as it navigates economic stabilization efforts amidst global uncertainties. Meanwhile, federal Finance Minister Muhammad Aurangzeb revealed on Thursday ongoing negotiations with the International Monetary Fund (IMF) for additional loans, highlighting their intended focus on advancing economic reforms. In a statement released by the Ministry of Finance, Minister Aurangzeb discussed the successful completion of a nine-month loan program with the IMF and disclosed ongoing talks for a new medium-term program. He underscored Pakistan’s foreign exchange reserves standing at $9.4 billion, robust stock market performance, and a notable decline in inflation to 12.6% as of June 2024. Moreover, Aurangzeb highlighted positive economic indicators such as a 7.7% increase in remittances compared to the previous year and a substantial 30% rise in tax revenue during the fiscal year 2023-24.