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ISLAMABAD: Cash-strapped Pakistan has blamed geopolitics for the International Monetary Fund’s reluctance to revive its stalled bailout programme, claiming that global institutions want Pakistan to default on its sovereign debt, like Sri Lanka, and then enter negotiations with the global lender. .
Pakistan’s Finance Minister addresses the Parliamentary Committee on Finance and Revenue Ishaq Dar He said the IMF’s request for a $6 billion guarantee on external resources was unjustified and that the IMF’s delay plan seemed to indicate a political agenda.
“The geopolitics behind stopping the loan program until Pakistan defaults. Hostile foreign elements want Pakistan to turn into another Sri Lanka and then the IMF will negotiate with Islamabad,” Dar said.
Responding to the IMF’s objection to the tax exemptions granted in the recently disclosed budget, the minister said that Pakistan is a sovereign country and cannot accept everything from the IMF. As a sovereign country, according to Dar, Pakistan should have the right to offer some tax concessions. “The International Monetary Fund wants us not to offer tax concessions in any sector,” he added. The minister stressed that the country will fulfill its obligations with or without the IMF bailout package.
He said the IMF had not provided any reason for the “unnecessary delay” beyond the (current) ninth review, which has been pending since last November. “IMF or no IMF, Pakistan will not default,” he added.
“The tax breaks announced in the budget are catalysts for growth in the real sectors of the economy. This is the sustainable path to job creation and livelihood for the average citizen.” A statement from Pakistan’s Finance Ministry responding to IMF criticism said the amount is fairly small anyway.
With the International Monetary Fund (IMF) $6.7 billion Extended Financing Facility for Pakistan expiring on June 30, the federal budget presented earlier this month was the current government’s last hope to find grounds for reviving program of the International Monetary Fund and the payment of the $1.2 billion premium, which is part of the $6.7 billion rescue package. It didn’t take long for the International Monetary Fund to raise serious objections to the 2023-24 budget. She said the government missed an opportunity to broaden the tax base and reduce tax expenditures as well as tax amnesty conditions in exchange for the conditionality of the IMF program. Seeking major budget changes, the Washington-based lender has stated that it is willing to revise this budget before it passes through Parliament.
However, it seems unrealistic for the Pakistani authorities to reformulate the budget, cut more subsidies and raise more taxes, and that too in a fortnight.
Without the proper IMF, the chances of other countries, such as China, Saudi Arabia and the United Arab Emirates, stepping in are also slim as they have each made this very clear over the past few months.
However, it is known that Pakistan’s foreign exchange reserves will drop to $2.6 billion after paying out $900 million to creditors by the end of the month – just when the Extended Fund is due to expire – and that too if China helps by repatriating more than $2.3 billion of her money. deposits. That’s less than two months’ import cover, and about 10 times less than the $23 billion owed in one fiscal year.
Pakistan’s Finance Minister addresses the Parliamentary Committee on Finance and Revenue Ishaq Dar He said the IMF’s request for a $6 billion guarantee on external resources was unjustified and that the IMF’s delay plan seemed to indicate a political agenda.
“The geopolitics behind stopping the loan program until Pakistan defaults. Hostile foreign elements want Pakistan to turn into another Sri Lanka and then the IMF will negotiate with Islamabad,” Dar said.
Responding to the IMF’s objection to the tax exemptions granted in the recently disclosed budget, the minister said that Pakistan is a sovereign country and cannot accept everything from the IMF. As a sovereign country, according to Dar, Pakistan should have the right to offer some tax concessions. “The International Monetary Fund wants us not to offer tax concessions in any sector,” he added. The minister stressed that the country will fulfill its obligations with or without the IMF bailout package.
He said the IMF had not provided any reason for the “unnecessary delay” beyond the (current) ninth review, which has been pending since last November. “IMF or no IMF, Pakistan will not default,” he added.
“The tax breaks announced in the budget are catalysts for growth in the real sectors of the economy. This is the sustainable path to job creation and livelihood for the average citizen.” A statement from Pakistan’s Finance Ministry responding to IMF criticism said the amount is fairly small anyway.
With the International Monetary Fund (IMF) $6.7 billion Extended Financing Facility for Pakistan expiring on June 30, the federal budget presented earlier this month was the current government’s last hope to find grounds for reviving program of the International Monetary Fund and the payment of the $1.2 billion premium, which is part of the $6.7 billion rescue package. It didn’t take long for the International Monetary Fund to raise serious objections to the 2023-24 budget. She said the government missed an opportunity to broaden the tax base and reduce tax expenditures as well as tax amnesty conditions in exchange for the conditionality of the IMF program. Seeking major budget changes, the Washington-based lender has stated that it is willing to revise this budget before it passes through Parliament.
However, it seems unrealistic for the Pakistani authorities to reformulate the budget, cut more subsidies and raise more taxes, and that too in a fortnight.
Without the proper IMF, the chances of other countries, such as China, Saudi Arabia and the United Arab Emirates, stepping in are also slim as they have each made this very clear over the past few months.
However, it is known that Pakistan’s foreign exchange reserves will drop to $2.6 billion after paying out $900 million to creditors by the end of the month – just when the Extended Fund is due to expire – and that too if China helps by repatriating more than $2.3 billion of her money. deposits. That’s less than two months’ import cover, and about 10 times less than the $23 billion owed in one fiscal year.
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