Pakistan is expecting the International Monetary Fund (IMF) to approve a $502 million loan in mid-September after it ensured the donor agency that it is ready to adopt a set of policy measures to meet the conditionalities. After attending the IMF meetings in Dubai, Finance Minister Ishaq Dar held a series of meetings in Islamabad to discuss various pressing issues, including the autonomy of the State Bank, expansion of tax net and privatisation of the government-owned organizations to pave the way for meeting the targets set by the IMF for the approval and release of the next tranche. The government has already convened biddings for the privatisation of National Power Construction Company to meet one of the prior actions. Dar has also approved a reference price for the sale of the company, leading to some more divestments in the near future. A meeting of the National Assembly Standing Committee on Finance was convened to meet the financial targets in line with a conditionality of the IMF program.
Rampant corruption in the power sector is one of the main causes of the energy crisis in the country. A delay in removing numerous deficiencies is hindering the flow of funds from the World Bank, Asian Development Bank and other lending agencies for the improvement of this sector. Unfortunately, the frail economy looks towards Washington to help obtain even the IMF loans. The people of Pakistan are destined to live in dark on the financial and economic issues as the IMF is not in a hurry to let them know the situation in the background. The NA standing committee has approved the proposed State Bank of Pakistan (Amendment) Bill 2015 for the establishment of a committee to take decisions on the monetary policy. Amendments to SBP Act of 1956 will clip the powers of the executive board of the State Bank, allowing the Monetary Policy Committee to determine policy rate.
The people of Pakistan need a blow of fresh air which is missing in every government action. People do not want amendments, but reforms in economic and financial discipline whereas the government is following hackneyed path of commissions and omissions. The country has the potential to enhance exports of indigenous products, but it has failed to find new markets. There is a need to benefit from the growing cottage industry and concentrate on the exports of local-made products rather than yearning for the production and exports of high tech equipment.
