The International Monetary Fund (IMF) has asked Pakistan to hold a one day seminar for its mission officials to seek public opinion before they starts consultations on the country’s economic performance under the article four negotiations in November.
An official source said the government has decided to hold the seminar on IMF request in which politicians from all major parties will be invited to speak. He said the interaction with the political parties will help visiting IMF officials to better understand the interlinked complex political and economic issues which are hindering implementations of reforms.
The dates of the visit of the IMF delegation have not been finalised as yet but they are expected to arrive soon after Eid. Under the article four IMF holds consultations with its member countries once every year but with Pakistan it has not held talks for the last two years. Last consultations were held in 2009.
After the expiry of the suspended standby facility of $11.3 billion on September 30, this year, Pakistan has decided not to opt for a new program as she had failed to implement the agreed revenue and power sectors reforms. Without accomplishing the reforms asking for a new program was a tough choice as this would have come along with stringent conditions, he added.
The government has already decided to keep IMF engaged on the economic front so that getting a new bailout package could be easier if the need arises in the future. This will also allow the government to keep getting financial assistance for development projects from bilateral and multilateral donors. The budgetary financing from the donors is only possible if IMF issues a letter of assessment, which is quite possible after the November talks the source said.
When asked if the estimates of handful external inflows through remittances and exports did not materialise as assessed what will be the government’s strategy, he said the privatisation process has remained dormant for the last three years and it will be expedited. The government plans to revive the privatisation process by complete sell off of 2 state owned entities along with plans to off load 5 per cent shares of 6 profitable energy and financial sector entities during the current fiscal year.
Under the plan Heavy Electrical Complex (HEC) and the National Power Construction Company (NPCC) will be sold along with their management control by December, this year. Selling off of NPCC will help fetch close to $42 million, while sale of 26 per cent shares of HEC will generate close to Rs3 billion.
The secondary off loading of 2.5 per cent shares of Pakistan Petroleum Limited (PPL) at the local stock exchanges will generate Rs6 billion, while off load of 5 per cent shares of the National Bank of Pakistan will generate Rs5 billion, Habib Bank Limited Rs6 billion, National Insurance Company Rs10 billion and State Life Insurance Company Rs9 billion. If the response in the shares of these state owned entities was overwhelming then the government may opt for enhancing the transaction size up to 10 per cent shares, the source said adding that it will all depend on market conditions and response. About the floating of $500 million OGDCL exchangeable bonds, he said that the government will make decision on the advice of financial advisors. The bond was initially planned to be launched in June last fiscal year but was delayed to due to the international debt crisis.
