DAR FORESEES ‘ALTERNATIVE’ IF IMF FUNDING NOT ARRIVED In partnership with
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Sunday, 11 June, 2023 I 21 Zilqad, 1444
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SAYS KSA, UAE TO TRANSFER ADDITIONAL $2B AND $1B LOAN RESPECTIVELY TILL JUNE 30
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ISLAMABAD SHAHZAD PARACHA & GHULAM ABBAS
INANCE Minister Ishaq Dar said that Pakistan has an alternative plan in case we could not get the $2.4 billion pending amount from the IMF of ninth and tenth review. During a post-budget press conference in Islamabad, the Finance Minister said that Saudi Arabia and UAE have given confirmation to transfer additional $2 billion and $1 billion loan respectively till June 30, 2023 so that’s why we have mentioned in the budget documents. As for $2.4 billion IMF funding, he said that i have requested the IMF to complete the ninth review as tenth review is not possible now and we are expecting $1.4 billion from IMF and waiting when this will be transferred. “If IMF funding is not arranged then we have an alternative option because Pakistan has paid more than $3.5billion to commercial banks due to which not only our external debt has been reduced by almost four billion dollars but we are expecting relief from commercial banks”, he added. On another question, the Finance Minister replied that “As far as Paris Club rescheduling, we have no such plan on our menu. We will not go for rescheduling multilateral debt. “We will make the payments on time and when they become due,” he said, ” I don’t think it is a dignified
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INSISTS THERE’S NO PLAN TO APPROACH MULTILATERAL OR DEVELOPMENT INSTITUTIONS FOR DEBT RESCHEDULING
way to go and tell them that we cannot pay. That means you’re declaring yourself that you are not in a position [to pay],” he clarified. The government can talk to bilateral partners for debt rescheduling but stressed that the relief will not include “haircuts or write-offs’ ‘, you negotiate for a longer term and this is nothing unusual because of covid, flood catastrophe and other things and we can consider bilateral debt rescheduling on backloading the principal and focusing on debt servicing, on the other hand, he vowed that we will pay to multilateral creditors on time”. The Finance Minister also said that while requesting a debt restructuring or write-off was not on the table, negotiations could be pursued for extending the repayment period. This option existed and could be explored after the budget process, he added. Dar insisted that there were no plans to approach multilateral or development institutions to request debt rescheduling, emphasising Pakistan’s commitment to meeting its obligations. The minister emphasised that there was no requirement for rescheduling domestic debt, expressing concerns about its impact on the government’s ability to function effectively. This is not the right time to go domestic debt rescheduling as we have now 22percent policy rate. when we have a reasonable policy rate then we will go for domestic debt rescheduling, he added. Dar pointed out that the previous government had
revoked the practice through amendments, which resulted in commercial banks benefiting and an increase in the policy rate. The Finance Minister said that there had always been a plan to make Pakistan self-sufficient and self-reliant. He firmly stated that Pakistan will not default, adding that those who talked about default had themselves made mistakes and were complicit in the economic losses incurred by the country. The minister stated that dignified nations should take proactive measures to prevent economic defaults, noting that Pakistan had also followed the same approach. The Finance Minister said that the government is working on developing T-bills which will be provided directly to the general public rather than giving banks so this will break the monopoly of powerful sectors. Everyone will see a positive improvement in upcoming days, he added. Regarding subsidies, the minister acknowledged that the government had provided numerous subsidies. Specifically, he mentioned that over Rs900 billion was allocated solely for the power sector. He underlined the need to address and improve this sector, highlighting the efforts made thus far. He also noted that the power sector had been a significant “stumbling block” in the talks with the IMF, but it remained an area of focus. Furthermore, he mentioned the emphasis placed on renewable green energy and clarified that no new subsidies were being introduced in this sector. The minister addressed the circulation of another report regarding the withdrawal of sales tax on edible oil, clarifying that no such withdrawal has taken place. When asked about the government’s promised targeted subsidy for motorists regarding fuel, the minister clarified that the plan involved charging vehicles above 800cc a higher rate, while those below 800cc would receive a discount of Rs50 on fuel. He mentioned that although the plan was feasible, it faced challenges in terms of “current lending and borrowing process we are undergoing”. However, he said that this matter was unrelated to the budget. Responding to another question, the Finance minister said that the government has allocated funds for upcoming elections in the budget and JUI-F is our allies and our constitutions have room for delaying elections for one more year. Our intention is clear so that’s why we have allocated funds in the budget but we respect our allies, he added.
Over 28 dead, dozens injured as rain, thunderstorm wreak havoc in KP, Punjab PESHAWAR/LAHORE STAFF REPORT
At least 28 persons were killed and more than 60 injured in various windstorm, hailing and torrential rain related incidents in different areas of Khyber Pakhtunkhwa Province on Saturday, confirmed Rescue 1122. Spokesperson for Bannu Rescue 1122, Abrar Tariq told the BBC that 23 people have died so far in Bannu alone. According to the statement released by Rescue 1122, three people have died in Lakki Marwat and two in Kirk. The highest death toll has so far been reported in Bannu and according to Rescue 1122, the number is expected to rise. According to rescue officials, most of the deaths have been caused by the collapse of walls and roofs during in the windstorm followed by hailing and torrential rain. According to the administration, relief activities have been launched in several areas and medical assistance is being provided to the injured. All stations of Rescue 1122 in Khyber Pakhtunkhwa are on alert to deal with any untoward incident, said an official of the emergency service. He said relief activities continued as due to heavy rain, roof collapses occurred at many places in Lakki Marwat, Bannu and other parts of the province. He disclosed that Rescue 1122’s search and rescue operations are ongoing as all the injured are being shifted to the
hospital after providing medical aid on the spot. In a statement, KP Caretaker Information Minister Barrister Feroze Jamal Shah said that a high alert had been issued in the hospitals of the affected districts. He said the interim government was in contact with the authorities in the affected areas. FIVE KILLED IN KHUSHAB, GUJRANWALA: Similarly, heavy rains along with strong winds battered several parts of Punjab including Sargodha, Gujranwala, Faisalabad, Lahore and other districts. In Chan village of Khushab district of the province, three girls died after a wall of their house collapsed due to torrential rains.
Two more people were reportedly killed and more than a dozen others injured in rain-related incidents in Gujranwala district and other districts. Heavy rains and strong winds also disrupted electricity supply in many areas. Heavy rain with thunderstorm was also reported from different areas of Azad Jammu and Kashmir’s (AJK). PM GRIEVED OVER LOSS OF LIVES IN KPK RAINS: Prime Minister Shehbaz Sharif Saturday here expressed grief and sorrow over the loss of precious lives in rains in different areas of Khyber Pakhtunkhwa. The PM sympathised and condoled with the bereaved families, said PM’s media wing.
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He directed National Disaster Management Authority (NDMA) to ensure steps for relief and rehabilitation in the affected areas. He also ordered for coordination with the chief minister of Khyber Pakhtunkhwa. He asked NDMA to work together with Provincial Disaster Management Authority and Rescue 1122 to ensure complete assistance to the public in affected areas. WEATHER FORECAST: According to a Met Office forecast shared by the PDMA on Saturday evening, “very hot and dry weather” is expected in most districts of KP over the next 24 hours. But there were chances of wind/dust storms and isolated rain-thunderstorm in most plain areas of the province in the evening and at night, the statement said. It added that isolated spells of rain and wind/thunderstorms were expected in Chitral, Lower and Upper Dir, Buner, Swat, Shangla, Kohistan, Torghar, Battagram, Mansehra, Abbottabad, Bajaur, Mohmand, Khyber, Orakzai, Kurram and Waziristan districts in the evening and at night. Wind/dust storms may cause damage to loose infrastructure in Kurram, Hangu, Orakzai, North and South Waziristan, Tank, Kohat, Karak, Lakki Marwat, Charsadda, Peshawar, Khyber and Nowshera districts, the statement said. “All concerned authorities are advised to remain alert during the forecast period,” it said.
The finance minister who cried wolf g
Federal budget to fix long-term economic ailments: PM Shehbaz ISLAMABAD
STAFF REPORT
Prime Minister Shehbaz Sharif has said that the country’s economy direly needed reforms, which in turn, could be undertaken in a stable political environment as the economic development was intrinsically linked to political stability. In a post uploaded on his Twitter handle on Saturday, the prime minister stressed: “It is here that the Charter of Economy appears to be the only way forward for our political parties to achieve prosperity for our people.” In the lengthy tweet, Shehbaz Sharif referred to the laying of the fiscal budget 2023-24 and said that it represented the beginning of the process to fix the economy’s long-term ailments. The coalition government had prioritized the right areas that have the potential to spur economic growth, attract investment and make the economy self-sufficient, he added. The prime minister maintained that the making of budget (FY2023-24) was particularly a difficult task in view of the persistent challenges arising out of the flood-related relief and rehabilitation, global supply chain disruptions and geostrategic upheavals. “Neverending headwinds of political instability created by Imran Niazi damaged the economy and created uncertainty, as the country remained on the boil for well over a year,” he regretted. Shehbaz Sharif, mindful of the impact of inflation, said the government provided relief to the public sector employees and pensioners in the form of pay raise of up to 35% and 17.5% respectively, and increased minimum wage to Rs32,000. The premier said a more balanced budget that levied no new tax could not have been possible within the existing constraints. The prime minister also commended all those who remained part of this exercise and played their role in the budget-making exercise.
PTI’s Qureshi terms launch of Jahangir Tareen’s IPP ‘dead on arrival’ LAHORE
STAFF REPORT
PTI Vice Chairman Shah Mahmood Qureshi described the launch of the newly formed Istehkam-iPakistan Party (IPP) — the new home of several PTI deserters — as “dead on arrival” on Saturday. Qureshi made the remark while speaking to the media outside an anti-terrorism court in Lahore. “There was an accident and a patient was taken to a hospital’s emergency [ward] … The doctor examined him and said, ‘Dead on arrival'”. “So I will say this is a launch which is dead on arrival,” he said about the IPP. Responding to Qureshi, another one-time confidant of the PTI chief and now a part of the IPP, Aleem Khan said on Twitter, “Respected Qureshi sahib, it is in God’s hand to give honour or humiliation and only He knows who is ‘dead on arrival’ and whose ‘the end’ it is.” Led by Jahangir Khan Tareen — who once used to be a close aide of PTI chief Imran Khan — the IPP was formally launched on Thursday. At the launching ceremony, the former PTI leader was flanked by several other PTI defectors — including those who left in the aftermath of the May 9 incidents and amid a state crackdown on it. Those seen on the stage alongside him included former Sindh governor Imran Ismail, former PTI financer Aleem Khan, former Azad Kashmir prime minister Tanvir Ilays and former ministers Amir Kayani, Ali Zaidi, and Fayyazul Hassan Chohan, Firdous Ashiq Awan, Saeed Akbar Nawani and Nauman Langrial. Former federal information minister Fawad Chaudhry who was spotted in the back row deliberately chose not to sit on the stage. His “uneasy body language” gave way to speculations about his decision to join the IPP presumably “under pressure”. On several former PTI leaders joining the new party, Qureshi said today that “every political personality has the right to make their own political decisions”. The “friends” who have decided to join the IPP include “big names” and politicians, he said, adding that they had used their right to decide for themselves.
IT IS BECOMING HARDER AND HARDER TO BELIEVE MR DAR’S CLAIMS GIVEN HIS HISTORY OF BEING WRONG PROFIT
ABDULLAH NIAZI
One has a hard time believing Finance Minister Ishaq Dar these days. And that does not have to do with any political differences or any doubts regarding his intentions. It is simply a matter of probability. Ever since he came into the top job at Q block (his third stint no less) the good Senator has consistently proven to be wrong. When he first replaced Miftah Ismail in September last year he came in with the promise of keeping the rupee strong and
building a base for the PML-N to build an election campaign on. He has failed on both those accounts. In his bullheaded attempts he also alienated an IMF that was already quite annoyed with Pakistan’s economic management. Despite tall claims that he would manage the fund and bring the deal home, Dar’s chest thumping only seemed to antagonise the IMF further. By February, Dar was made to eat humble pie when an IMF mission came and left without signing a Staff Level Agreement. In the five months since, Dar and other members of the government in-
cluding Prime Minister Shehbaz Sharif have regularly claimed that the agreement is “just around the corner.” As the months have passed by, the credibility of this mantra of “just around the corner” has taken a serious hit. And now we have arrived at the budget for next year. It is clear that the government has presented a populist budget in the hopes of gaining some support before the elections. It I also seems that Dar is now more than ready to burn bridges with the IMF. In an interview right after his budget speech on a private television channel, Dar ap-
peared cornered and erratic. In his post budget presser on Saturday, he seemed more haggard than defiant. He has claimed of course that following the budget process the government is contemplating discussions with bilateral partners regarding debt restructuring. “As far as Paris Club rescheduling, we have no such plan on our menu. We will not go for rescheduling multilateral debt. We will make the payments on time and when they become due. I don’t think it is a dignified way to go and tell them that we cannot pay. That means you’re declaring yourself that
you are not in a position [to pay],” he said. Right after saying this and assuring the nation that the government had a plan in case the IMF did not come through, Dar claimed that Pakistan will not default, adding that those who talked about default had themselves made mistakes and were complicit in the economic losses incurred by the country. The claims, of course, are well taken but are hard to believe. Whether Pakistan defaults or not is yet to be seen. What we do know is that the road will not be as simple as the senator claims.