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Finance Minister admits failure to meet IMF agreement terms


Finance Minister, Muhammad Aurangzeb, admitted that several issues still remained regarding Pakistan’s adherence to agreements with the International Monetary Fund (IMF).

ISLAMABAD: Finance Minister, Muhammad Aurangzeb, admitted that several issues still remained regarding Pakistan’s adherence to agreements with the International Monetary Fund (IMF).

During remarks at the Islamabad Literature Festival, the finance minister stated that while the government entered into agreements with  the IMF, it frequently failed to meet the required conditions.

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Aurangzeb said that the government’s primary responsibility was to establish policy, while the private sector should drive business and economic activities.

He noted that states do not operation on donations but rely on tax revenues.

The finance minister said that state-owned enterprises (SOEs) should have been privatised long ago. He announced plans for the Federal Board of Revenue (FBR) to achieve full digitisation and expressed the need to foster a supportive environment for commercial activities.

Regarding the issue of inflation, Aurangzeb called on provincial governments to implement measures aimed at curbing rising prices.

He pointed out that Pakistan’s population is growing at a rate of 2.5 per cent. Aurangzeb described this as a “population bomb” that poses a huge threat to the country in relation to poverty, stunted growth and an increasing number of out-of-school youth.

The finance minister revealed that an IMF mission was scheduled to arrive in Pakistan next week for a review.

He conceded that there was a huge deficit in trust and credibility, that while agreements were established, their execution often falls short.

Aurangzeb indicated that the IMF would be briefed on the current situation during the visit.

The finance minister also discussed the importance of a national financial agreement with the provinces,  which he believes  will improve revenue generation and control expenditures.

In terms of attracting foreign investment, he talked about the focus on business-to-business investment in the second phase of the China-Pakistan Economic Corridor (CPEC).

Aurangzeb promised to draw foreign direct investment (FDI) into the export sector, while admitting defeat on failing to privatise the Pakistan International Airlines (PIA).

He said that all government-owned enterprises would be ‘strategically’ privatised, with management control transferred to the private sector.

He also announced plans to issue bonds in the global market and stated that the government was engaging with global eating agencies to facilitate the process.

Aurangzeb mentioned that the governor of State Bank of Pakistan was providing ‘factual briefings’ to the agencies, and that an improvement in Pakistan’s credit rating could enable bond issuance in the international market.

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He also highlighted the ongoing efforts to issue panda bonds in China.

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