The International Monetary Fund has describe the inordinate delay in privatization of loss making public sector organizations as ‘unfortunate’. However, the fund has been going ahead with its $6.2 billion extended facility programme since September 2013 despite the failure of the government to introduce structural reforms in various sectors, including delaying the process of privatization. At least $5.5 billion have already been extended to Pakistan without any remarkable improvement in the economic conditions whereas the country will need $6 billion annually for debt servicing for another four years at a stretch. According to Harald Finger, the IMF mission chief to Pakistan, the officials from both sides are engaged in detailed discussions to increase tax net and improve tax-to-GDP ratio in the country which is the lowest in the South Asian region. The fund also wants the center to coordinate with provinces and focus on the modernization of property tax collection system and bring clarity in the customs rules to discourage under-invoicing. It also refers to alleged corruption and bad governance in the tax collection authority — a point to ponder for those who matter.
The funds also seeks reforms in the electricity and gas sectors to offset setbacks and ensure that the provision of utility services would not face any financial constraints. When a government takes its financial matters to an outsider entity for help, it should have to prepare itself to listen to the advices and dictates and it will also have to compromise on its decision-making ability. However, it is also a blessing in disguise that the foreign institutions off and on point out anomalies in the administrative affairs of this country. Whether the government will look towards the fund again or not after the completion of the current programme is a million dollar question. The donor agency has identified the areas of concern which include declining exports, law and order and appreciation of exchange rate. The government has so far been resisting the depreciation of Pakistani rupee, but pressure is piling up due to frailty of the economy. According to the fund officials, the government has assured that the center will try to make a better coordination with provinces for macroeconomic stability.
The loss making entities are no more assets but liabilities and the government will have to find a solution in consultation with all the stakeholders involved in it. Finger hopes that dialogue process will continue with the stakeholders to develop consensus to either restructure or privatize the public sector organizations. However, more the government look for foreign loans, more it will have to compromise on its ability to take independent decisions.
