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Shahbaz Rana
March 23, 2023
The International Monetary Fund (IMF) on Thursday rejected Pakistan’s claim that its programme conditions were one of the reasons for delaying polls in two provinces – Punjab and Khyber-Pakhtunkhwa – saying Islamabad has the right to reprioritise expenses or raise additional taxes to meet constitutional obligations.
“There is no requirement under Pakistan's EFF-supported programme which could interfere with Pakistan's ability to undertake constitutional activities,” said Esther Perez Ruiz, the resident representative of the IMF.
It is for the second time in the past four days that the IMF has rebuked Pakistan’s claim about interfering in matters that do not fall in the domain of the $6.5 billion bailout package, setting the record straight and refusing to offer its shoulder for the politics to the ruling Pakistan Democratic Movement (PDM).
The statement came a day after the Election Commission of Pakistan postponed elections in Punjab and Khyber-Pakhtunkhwa till October 8, citing lack of security and finances to hold elections in these two provinces.
The statement also suggests that the trust deficit is deepening between Pakistan and the IMF due to Pakistan’s inability to meet its international and domestic constitutional obligations and blaming the IMF for its own failures.
“The IMF sets aggregate general government targets (aggregating across federal and provincial government levels) and within these there is fiscal space to allocate or reprioritise spending and/ or raise additional revenues to ensure constitutional activities can take place as required,” stated Esther Perez.
The ECP requires Rs20.5 billion for holding elections in Punjab and K-P. It needs another Rs5 billion for holding by-elections on 93 vacant seats of the National Assembly. In total, the ECP needed Rs25.5 billion, which is not much compared to Rs11.2 trillion revised annual budget for this fiscal year. The needed funds are equal to just 0.18% of the annual budget of the federal government.
The IMF resident representative further stated that decisions regarding the constitutionality, feasibility, and timing of the provincial and general elections rest solely with Pakistan's institutions – setting the record straight.
Just this week, the Economic Coordination Committee of the Cabinet approved supplementary grant of Rs27 billion to avoid default on diesel payment to Kuwait. Two days ago, the minister for planning launched Rs150 billion worth politically oriented development projects for the youth of the country.
In its elections postponement order the ECP narrated a statement by the federal secretary finance.
“Secretary Finance while briefing the Commission stated that due to the paucity of funds and financial crunch, the country is facing an unprecedented economic crisis and it was under compulsion by IMF programme which has set targets for maintenance of fiscal discipline and deficit, and it would be difficult for Government to release funds now for general elections to the provincial assemblies of Punjab, Khyber-Pakhtunkhwa and later for General Elections to National Assembly, provincial assemblies of Sindh and Balochistan,” according to the ECP order.
The ECP further stated that the federal government has conveyed that due to the critical economic situation of the country, it will be very difficult to provide funds for the elections at the moment and additional funds for the staggered elections.
The details showed that in case of segregated elections, the additional cost is Rs9.3 billion.
Last month, the federal cabinet had revised the budget estimates to Rs11.2 trillion – an increase of Rs1.3 trillion or 17% over the budget passed just eight months ago.
The government has also revised the estimate of provincial surpluses downwards to Rs559 billion, compared to the budgetary figure of Rs750 billion. As a result, the overall deficit has been projected at Rs5.7 trillion, or 6.8% of GDP.
For its programme purposes, the government has set the primary deficit target at Rs465 billion, or 0.5% of GDP, compared to the previous target of Rs153 billion in surplus.
Prime Minister Shehbaz Sharif also this month announced Rs73 billion worth free wheat flour schemes in two provinces where the elections are due under the Constitution but are delayed.
The cost of these schemes, funded by provincial governments, is almost three times more than the cost of holding elections in two provinces.
The Rs73 billion spending on wheat flour subsidy might jeopardise the recently agreed fiscal framework with the IMF, which requires Rs559 billion provincial cash surpluses. The sources said that K-P had informed the prime minister that it did not have the entire Rs19 billion funds to finance the free wheat flour scheme. The plan is to give free wheat flour to 5.7 million families in the province.
It is the second time in four days that the IMF has refused to offer its shoulder to the coalition government in Pakistan. Earlier, Esther Perez stated, “I want to be categoric that there is absolutely no truth to this or any insinuated link between the past and the current IMF-supported programmes and decision by Pakistani government over its nuclear programme.”
The IMF’s country head stated that programme discussions had exclusively focused on economic policies to solve Pakistan’s economic and balance of payments problems, in line with the IMF’s mandate for promoting macroeconomic and financial stability.
Pakistan and the IMF programme remains stuck due to non-fulfilment of conditions about $6 billion additional loans and interest rate hike.
tribune.com.pk
IMF rejects claim of linking polls delay with fund’s conditions
There is no requirement which could interfere with constitutional activities, says IMF officialShahbaz Rana
March 23, 2023
The International Monetary Fund (IMF) on Thursday rejected Pakistan’s claim that its programme conditions were one of the reasons for delaying polls in two provinces – Punjab and Khyber-Pakhtunkhwa – saying Islamabad has the right to reprioritise expenses or raise additional taxes to meet constitutional obligations.
“There is no requirement under Pakistan's EFF-supported programme which could interfere with Pakistan's ability to undertake constitutional activities,” said Esther Perez Ruiz, the resident representative of the IMF.
It is for the second time in the past four days that the IMF has rebuked Pakistan’s claim about interfering in matters that do not fall in the domain of the $6.5 billion bailout package, setting the record straight and refusing to offer its shoulder for the politics to the ruling Pakistan Democratic Movement (PDM).
The statement came a day after the Election Commission of Pakistan postponed elections in Punjab and Khyber-Pakhtunkhwa till October 8, citing lack of security and finances to hold elections in these two provinces.
The statement also suggests that the trust deficit is deepening between Pakistan and the IMF due to Pakistan’s inability to meet its international and domestic constitutional obligations and blaming the IMF for its own failures.
“The IMF sets aggregate general government targets (aggregating across federal and provincial government levels) and within these there is fiscal space to allocate or reprioritise spending and/ or raise additional revenues to ensure constitutional activities can take place as required,” stated Esther Perez.
The ECP requires Rs20.5 billion for holding elections in Punjab and K-P. It needs another Rs5 billion for holding by-elections on 93 vacant seats of the National Assembly. In total, the ECP needed Rs25.5 billion, which is not much compared to Rs11.2 trillion revised annual budget for this fiscal year. The needed funds are equal to just 0.18% of the annual budget of the federal government.
The IMF resident representative further stated that decisions regarding the constitutionality, feasibility, and timing of the provincial and general elections rest solely with Pakistan's institutions – setting the record straight.
Just this week, the Economic Coordination Committee of the Cabinet approved supplementary grant of Rs27 billion to avoid default on diesel payment to Kuwait. Two days ago, the minister for planning launched Rs150 billion worth politically oriented development projects for the youth of the country.
In its elections postponement order the ECP narrated a statement by the federal secretary finance.
“Secretary Finance while briefing the Commission stated that due to the paucity of funds and financial crunch, the country is facing an unprecedented economic crisis and it was under compulsion by IMF programme which has set targets for maintenance of fiscal discipline and deficit, and it would be difficult for Government to release funds now for general elections to the provincial assemblies of Punjab, Khyber-Pakhtunkhwa and later for General Elections to National Assembly, provincial assemblies of Sindh and Balochistan,” according to the ECP order.
The ECP further stated that the federal government has conveyed that due to the critical economic situation of the country, it will be very difficult to provide funds for the elections at the moment and additional funds for the staggered elections.
The details showed that in case of segregated elections, the additional cost is Rs9.3 billion.
Last month, the federal cabinet had revised the budget estimates to Rs11.2 trillion – an increase of Rs1.3 trillion or 17% over the budget passed just eight months ago.
The government has also revised the estimate of provincial surpluses downwards to Rs559 billion, compared to the budgetary figure of Rs750 billion. As a result, the overall deficit has been projected at Rs5.7 trillion, or 6.8% of GDP.
For its programme purposes, the government has set the primary deficit target at Rs465 billion, or 0.5% of GDP, compared to the previous target of Rs153 billion in surplus.
Prime Minister Shehbaz Sharif also this month announced Rs73 billion worth free wheat flour schemes in two provinces where the elections are due under the Constitution but are delayed.
The cost of these schemes, funded by provincial governments, is almost three times more than the cost of holding elections in two provinces.
The Rs73 billion spending on wheat flour subsidy might jeopardise the recently agreed fiscal framework with the IMF, which requires Rs559 billion provincial cash surpluses. The sources said that K-P had informed the prime minister that it did not have the entire Rs19 billion funds to finance the free wheat flour scheme. The plan is to give free wheat flour to 5.7 million families in the province.
It is the second time in four days that the IMF has refused to offer its shoulder to the coalition government in Pakistan. Earlier, Esther Perez stated, “I want to be categoric that there is absolutely no truth to this or any insinuated link between the past and the current IMF-supported programmes and decision by Pakistani government over its nuclear programme.”
The IMF’s country head stated that programme discussions had exclusively focused on economic policies to solve Pakistan’s economic and balance of payments problems, in line with the IMF’s mandate for promoting macroeconomic and financial stability.
Pakistan and the IMF programme remains stuck due to non-fulfilment of conditions about $6 billion additional loans and interest rate hike.
IMF rejects claim of linking polls delay with fund’s conditions | The Express Tribune
The International Monetary Fund on Thursday rejected Pakistan’s claim that its programme conditions were one of the reasons for delaying polls in two provinces
