Dr. Abid Qaiyum Suleri, Executive Director, Sustainable Development Policy Institute (SDPI) on Monday said the federal and Punjab governments although with good intentions have announced power subsidies that might surprise the IMF and impact the IMF deal in the offing.
The Executive Director SDPI while talking to media said there is no probability of snap elections as there is no possibility or circumstances foreseen, but rather the present government will secure and implement the IMF plans and programs.
Dr. Abid Qaiyum Suleri underlined that the international finance lending institutions despise surprises as these turns all the conditions and modalities finalized under the agreement topsy turvy.
“IMF should not be given surprise, but rather taken into confidence as the Fund has clearly asked to recover full cost of electricity from consumers and there is no change possible after staff level agreement finalization,” he said.
The federal and Punjab governments would provide energy subsidy although managed through annual development plans and other fiscal venues comes after the staff level agreement and it demands not only taking into confidence the IMF country director but also the staff level officials who crafted the agreement during the negotiations. Any delay in IMF program would further push the government into a fix, he added.
Dr. Suleri mentioned that the Finance Minister’s statements project positivity for implementing the agreement’s conditions. However, he needs to ensure that the numbers locked during IMF staff review do not change without IMF consent.
Commenting on the absence of Pakistan on the agenda of the IMF board meeting to be held in September, he said the period between staff level agreement and board meeting is a freezing period. Any unilateral change in policy or numbers during this period turns it difficult for the fund management to present the case in the board meeting, he added.
Dr. Suleri informed that the government has kicked off backdoor negotiations with friendly countries for a rollover and oil on deferred payments from KSA, UAE and others.
He described visit of the Chinese premier ahead of the Shanghai Cooperation Organisation (SCO) moot to be hosted by Pakistan in October as a good omen.
Along with other bilateral issues the PM of Pakistan would definitely take up the issue of deposits rollover with the visiting Chinese premiere. Additional deposits from China will bring us closer to the IMF, he added.
He pointed out that all targets under the IMF conditions are being met except the energy subsidy, and foreign deposits rollovers whereas the Federal Board Revenue despite its sluggish slackness in revenue targets for the month August remained on the track since July and is expected to show propitious outcomes in September.
“The government would make efforts to manage the revenue targets under the IMF agreement in the prevailing scenario which is an uphill task but not impossible, he said, adding, the tax revenue would be collected through indirect taxes.
He said the government has started work on privatization of state-owned enterprises (SOEs). To him, the Pakistan International Airlines (PIA) is a politically sensitive organisation that will attract reservations of various political parties. If its privatisation is managed well then it will be easy for ensuring privatisation of other SOEs.
The employees, he said may be taken into surplus pool and attached with relevant departments which will not bring more unemployment as those employees will serve in other departments.
However, he said the delayed IMF deal may result in rupees depreciation, he said.
Commenting on energy subsidies as political stunt, he said every political government had this compulsion to ensure maximum relief for it’s constituencies whereas its modalities can be discussed as it is a compulsory feature.
