Pakistan hopes for ‘quick’ financial assistance from multilateral donors after IMF agreement
KARACHI: Pakistan expects “quick” disbursement of financial assistance from multilateral donors after reaching a staff-level agreement (SLA) with the International Monetary Fund (IMF), Caretaker Finance Minister Shamshad Akhtar said on Thursday.
The IMF announced on Wednesday it had reached an SLA with Pakistan on the first review of a $3 billion economic stabilization program. IMF and Pakistan signed the $3 billion standby agreement (SBA) in July under which the South Asian country is expected to receive a second tranche of $700 million after the successful review.
Akhtar, speaking at the closing session of the 7th edition of ‘The Future Summit’ organized by the Nutshell Group in Pakistan’s southern port city of Karachi, said inflows from the IMF would help increase the country’s foreign exchange reserves and unlock “quick” disbursements.
“After the IMF management and board have approved the package, we should be able to get another $700 million,” the minister said.
“We are hoping there will be the unlocking of the multilateral quick disbursement assistance, which we have already negotiated.”
Pakistan expects to bridge an external financing gap of $6.5 billion, mainly from “friendly countries” and multilateral donors.
Speaking to reporters earlier in Islamabad, Akhtar said it was necessary for Pakistan to stay in the IMF’s program, adding that the South Asian country may negotiate a new bailout program with the lender.
Speaking at the summit, the finance minister said Pakistan was working toward separating the country’s tax policy and revenue division, saying it is part of the government’s tax reforms and efforts at restructuring the Federal Board of Revenue (FBR).
“Today, I had placed a decision before the leadership, to separate the customs from the revenue collection mechanism,” Akhtar said. “They will be tracking smuggling and other elements while revenue collection would remain the FBR’s mandate.”
The minister said the government will move toward innovative digital technologies that help broaden Pakistan’s tax base and minimize the gap between tax policy and compliance.
Speaking about the Special Investment Facilitation Council (SIFC), a recently formed hybrid civil-military government body, Akhtar said it has been set up to materialize new investments in critical infrastructure.
She said the SIFC had been set up also to materialize investments in Pakistan’s neglected productive sectors such as agriculture, minerals and IT.
“It is facilitating G2G arrangements and has successfully executed the first transaction between KPT (Karachi Port Trust) and AD (Abu Dhabi ) Ports of the UAE for a container terminal at Karachi,” she said.
“We are also looking at a few other G2G arrangements.”
The minister said the SIFC was also expediting investment projects worth about $10 billion, particularly the Saudi Aramco refinery and the agriculture corporate farm lease of 85,000 acres of land to potential foreign investors.