We are on slippery slope

Without revealing when Pakistan will be going again to the International Monetary Fund (IMF) for a bailout package, Finance Minister Dr Abdul Hafeez Shaikh on Saturday conceded that the position was “uncomfortable” but still “manageable”.
Addressing a post-budget news conference on Saturday, the minister said that the country had braved tough times without the IMF for the last two fiscal years. The assistance from the Fund stands suspended since May 2010. “We are in an uncomfortable but manageable position,” he said.
Pakistan is expected to pay $3.5 billion to IMF during the next fiscal year. The import bill of POL products is expected to increase to $17 billion in the next fiscal year and both of these will create a major pressure on the country’s foreign exchange reserves of $16.5 billion. Experts point out that the government will be reverting back to IMF in the next few weeks.
Perturbed by repeated questions relating to the IMF, Shaikh said there was no disgrace in going back to the IMF as it was created by the member countries for countering short-term liabilities. “We are continuously in touch with them and have made a prearranged repayment of $1.2 billion to IMF”.
The government has exercised restraint in its expenditure even though it was claimed that it would be free fall in an election year, he said. However, the minister said he could not publicly comment on the relations with the Fund.
He gave a similar reply when asked about the blockage of Coalition Support Fund (CSF) dues from the United States. The government this year expunged the section on losses related to war against terrorism from the Economic Survey.
The minister was absolutely at loss on giving a convincing reply on when the government would be able to contain the long power outages. His remarks that the people were not protesting against outages but for affordable power price shows disconnect between the government and the people. He said that the federal government will be picking up the inter-DISCO tariff differential subsidy. Earlier, the Centre was pushing the provinces to share the burden from their share in revenue pool. Asked that the budget for the next fiscal offers nothing to the people, he used the mantra of providing more development spending in the backward areas and Benazir Income Support Programme that is providing cash grant of Rs 1,000 per month to the poorest of the poor in the least developed areas. Disagreeing with a question that the government was using indirect measures to enhance revenue through gas infrastructure development surcharge, he said that it was a demand rationalization step to lessen the demand for natural gas which is the most affordable fuel.