- Any fine print in the document?
An agreement was reached on a bailout package on Sunday between the technical teams of the government and IMF. PM’s Finance Adviser Dr Hafeez Shaikh revealed that Pakistan would receive $6 billion worth of assistance under the programme over a period of three years. Asked to share the conditions that Pakistan has agreed to, Dr Shaikh said there were many thing desired by the Fund that the government thought were in the country’s interest. He chose to speak about aligning expenditure with resources, improving the functioning of loss-making state-owned enterprises and curtailing the subsidies. Dr Sheikh was apparently economizing on facts, keeping in view that a further rise in prices that he too expects after the IMF package would affect the livelihood of tens of millions of people. He resorted to understatement when he said that subsidies were being curtailed in the case of the wealthy and only rich segments of society were being taxed, forgetting that when about 60 per cent of revenue is collected through indirect taxation, none is spared from the payment of enhanced taxes.
There are other questions that need answers. It was hoped that the IMF Board of Directors, which constitutes the final authority, would sign the deal brokered by the technical teams of the two sides by Monday. Somehow or other this has failed to happen. Does the agreement have any linkages with the FATF, and is the IMF Board of Directors waiting for the outcome of the “Face-to-Face Meeting” of the Pakistan delegation with the Asia-Pacific Group (APG), a regional affiliate of the FATF, due to end today?
The sudden and unexpected removal of Asad Umar as Finance Minister in the midst of talks with the IMF has raised apprehensions regarding the change of command having been effected under IMF pressure. It has in fact been suggested that the former Finance Minister was removed on the IMF’s insistence. Mr Umar said on Monday that he would speak next week to explain the difference between the terms and conditions he had negotiated with the IMF for the bailout package and those accepted by the new economic team of the government. There is apparently more to the bailout package than meets the eye.