ISLAMABAD: The federal government has delayed the privatisation of power supply companies, which annoyed the International Monetary Fund (IMF).
Two government officials with direct knowledge of the situation said IMF officials who met Pakistani officials in Dubai this week to review progress on reforms were angered by the backtracking. But the IMF still agreed to release the next $497 million tranche of that loan, leaving a further $1.1 billion left to be released.
Announcing that its team in Dubai had agreed that the tranche should be disbursed, subject to approval by the Fund’s executive board, the IMF went on to lament Pakistan’s slow progress in some areas.
“While many structural benchmarks have been met, measures pertaining to the energy sector reform and restructuring of loss-making public enterprises are yet to be implemented,” the IMF said in a statement.
For all the IMF’s frustration over the privatisation delays, the government has pushed ahead on other reforms, Pakistani officials said. “The energy sector reforms are on track and we have been working consistently,” Finance Minister Ishaq Dar told a joint news conference with IMF mission chief Harald Finger when asked about the decision to shelve the privatisation of power supply companies.
“It was embarrassing and brutal,” a senior Pakistani official present at the meeting in Dubai, told Reuters, describing the IMF’s response when Finger was told that the government had decided not to sell nine power distribution companies because of fear of labour unrest. “It was nothing less than a dressing down. If the IMF still doesn’t penalise us, then all I can say is, ‘We’re very lucky’,” the official said.
Ishaq Dar, while addressing the joint conference with Harald Finger in Dubai, said Pakistan for the first time successfully completed 10th Review with IMF as previously we were known as two-tranche country.
“We are working to achieve 5% GDP growth during the ongoing financial year for Pakistan is on the path of economic trajectory,” he added. “The China-Pakistan Economic Corridor (CPEC) will contribute a lot to the economic development of the country,” he remarked.
