18 June,2022 , 04:01 amAdmin

Pakistan is in Need of US Help to Seek IMF Deal

Miftah and Aisha met with Donald Blome to inform him of government measures and any potentially problematic moves. According to at least two people familiar with the conversations. The government's economic team met with US Ambassador Donald Blome. And sought Washington's assistance and appreciation of the efforts taken thus far. Blome knew about the steps made to resurrect the program. And restore economic stability, according to the statement.

Meeting of Finance Minister

Miftah Ismail, the Finance Minister, and Dr. Aisha Pasha. The Minister of State for Finance met with the US envoy. The United States is the IMF's largest shareholder. And it has previously aided Islamabad in completing the fund's program evaluations.

Meeting of Finance Minister

The discussion between Pakistani and US officials took place on the same day. That the IMF clarified its position on its demand. That energy payments to Chinese Independent Power Producers get linked to concessions. given to the government by non-CPEC projects last year.

"It's not discussed on any platform that IMF has requested to Pakistan to again look forward to the contract. According to a statement attributed to the IMF's Resident Representative. Esther Perez, "these assertions are just incorrect."

Decision supported by IMF

Instead, IMF has supported the decision and gives a positive response that it’s a good idea to reserve energy. This will divide the burden into equal amounts for all. Including government, consumers, and producers.

Further, they suggested whether IMF wants that. Pakistan should negotiate with China about having concessions just like it did with the 1994 and 2002 policies. IPPs before settling outstanding dues of Chinese IPPs that was there just to have power purchase by Pakistan?" asked the Express Tribune.

The IMF did not dispute that it had requested Pakistan to renegotiate in its full response last week. Instead, it talked about Pakistan's "limited fiscal space". And "concluding renegotiations of capacity payment arrangements with over 30 IPPs last year."

The Contribution Should be Made by Everyone

Any advice presented that everyone should contribute together to help reduce the debts between the government. IPPs, and consumers," said the IMF country director last week, "while protecting the most vulnerable customers."

Pakistan owes the Chinese IPPs roughly Rs300 billion, and the IMF was keeping track of every payment made to them.

So far, 11 Chinese IPPs with a total generation capacity of 5,320 megawatts have become operational, with a total investment of $10.2 billion. Due to the depletion of imported coal supplies, over 2,000MW of power facilities are completely down.

According to a top Pakistani negotiator. The government is making all-out attempts to restart the program and has taken numerous unpopular moves. But it still falls short of the IMF's expectations.

IMF may Agree

According to the sources, if you don't notice any breakthrough in the next few days. The Secretary of Finance and the Minister of Finance may rush to the United States to speak with the president. The coalition administration had hoped that the IMF would agree to a staff-level agreement. After raising petroleum product prices and initiating the procedure for approval of an increase in power costs.

The IMF, on the other hand, wants not only to reverse the income tax rate cuts for the salaried class. But also to impose an additional cost of Rs125 billion on them. According to the sources, the government has now devised a fresh proposal. That involves undoing Rs47 billion in tax relief and then passing on an additional burden of Rs18 billion to the salaried class.

The previous administration promised to raise taxes on the salaried class. Beginning in July and to file a draught of personal income tax revisions with the IMF by the end of February 2022. The PTI failed to keep its promises.

The administration has already raised fuel prices dramatically and eliminated all subsidies. According to the sources, the IMF is now seeking the reinstatement of the petroleum levy and sales tax in addition to the current pricing.

Minister of State for Finance Dr. Aisha Pasha told the reporters following the Senate Standing Committee on Finance meeting. that the IMF now has more clarity on the new budget and that she hopes to strike a contract soon.

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