• Monday, May 20, 2024

Pakistan News

Pakistan needs 2-3 years to implement IMF reforms: Finance Minister

Pakistan Finance Minister Muhammad Aurangzeb (Photo credit: Getty Images)

By: Shajil Kumar

Pakistan would need two or three years to implement structural reforms prescribed by the IMF, Finance Minister Muhammad Aurangzeb has said, warning that the country would be looking for another bailout programme if it fails.

The finance minister is currently in the US to attend the spring meetings of the World Bank Group and discuss a new loan package with the International Monetary Fund (IMF).

The former banker said the country needed “timely decisions, timely execution” to build its economy as “no strategy works without execution.” Pakistan has already entered 24 programmes with the IMF.

“It’s time for us to start moving the execution of these aspects, and why we’re looking for a larger and extended programme, so once we get into the execution, we will need a two to three-year time period to go through the structural reforms,” he said.

Asserting that Pakistan needs to go end-to-end digitalisation of the tax authority to minimise human intervention, Aurangzeb said, “It’s not just about revenue, it’s about transparency and client experience, which is going to bring trust and confidence back into the tax authority.”

He added that Pakistan needs to move towards public-private partnerships at the federal and provincial levels.

Pakistan is nearing the end of a nine-month, $3 billion (£2.41b) loan program with the IMF designed to tackle a balance-of-payments crisis that brought it to the brink of default last summer.

With the final $1.1b (£880 million) tranche of that deal likely to be approved later this month, Pakistan has begun negotiations for a new multi-year IMF loan programme.

An IMF spokesperson told AFP that the Fund is “currently focused on the completion of the current Stand-by Agreement programme,” referring to the ongoing nine-month programme scheduled for completion shortly.

“The new government has expressed interest in a new programme, and Fund staff stands ready to engage in initial discussions on a successor programme,” the spokesperson added.

Pakistan held elections in February this year which were marred by allegations of rigging, with opposition leader Imran Khan jailed and barred from running, and his Pakistan Tehreek-e-Insaf party subject to a crackdown.

The shaky coalition that emerged, led by Shehbaz Sharif, is now tasked with engineering an economic turnaround by implementing a raft of unpopular belt-tightening measures.

“I do think that we will at least be requesting for a three-year programme,” Aurangzeb said. “By the time we get to the second or third week of May, I think we’ll start getting into the contours of that discussion,” he added.

As part of the structural reform programme agreed to by the previous government, Pakistan is in the middle of a privatization drive to sell off its poorly-performing state-owned enterprises (SOEs).

The first SOE on the list is Pakistan International Airlines, the country’s flag carrier.

“We will get to know in the next month or so with respect to interest from prospective bidders,” Aurangzeb said.

“Our desire is to go through with that privatization and take it through the finishing line by the end of June,” he added.

If the PIA privatization goes well for the government, other companies could soon follow.

“We’re creating an entire pipeline,” he said, adding: “Over the next couple of years we want to accelerate that.” (Agencies)

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