Islamabad:
Prime Minister Shehbaz Sharif urged the Director General of the International Monetary Fund (IMF) to mitigate certain strict loan conditions in the light of devastating floods on Wednesday. However, the world lender should first examine Pakistan’s budget to verify whether substantial allowances have been made for rescue and rehabilitation of the affected population before considering the concessions of the rescue program of several billion dollars.
Pakistan should start talks with the IMF Thursday in the middle of the mixed performance on the income front, not having fulfilled several agreed conditions. The main concerns include the underperformance of the Federal Board of Revenue (FBR) and the continuous disability of the government to reform public enterprises – both considered as major weaknesses in negotiations.
In a last minute decision to meet another condition of the world lender, the government granted the commercial car of five -year -old passenger cars on Wednesday. However, it simultaneously slapped a regulatory duty of 40% to protect local automobile assembly from increased competition.
Prime Minister Shehbaz asked for relief at her meeting with the Director General of the IMF, Kristalina Georgieva, on the sidelines of the United Nations General Assembly session, a few hours before the world lender and Islamabad block in 14 -day talks for the publication of a billion dollars loan.
“The Prime Minister said that the impact of recent floods on the Pakistan economy should be taken into account in the IMF exam,” said a statement that the Prime Minister’s office published after meeting Georgieva.
Sources of the Ministry of Finance said that the Government was asking for a relief from the IMF in the form of relaxing objectives for the surplus of the primary budget and the surplus in cash, in order to adapt to additional expenses for the communities affected by the floods. He also works on a rescue set for the agricultural sector.
However, sources have said that the IMF has communicated that it would first see the use of emergency funds which is allocated in the budget to respond to unforeseen expenses such as treating natural calamities.
It was afraid that the floods could lead to huge losses, but the damage should now be much lower than that initial.
Sources have declared that an official evaluation of the damage caused by the floods had not yet been finalized, because the committee led by the Minister of Planning Ahsan Iqbal has not yet submitted its report. They added that without a concrete evaluation, guaranteeing significant relief from the IMF can be difficult.
Sources have added that the IMF would also examine the expenditure on the value of the emergency pool of around 400 billion rupees. The government has not yet distributed large funds to people affected by the floods of the emergency pool.
Initially, there have been apprehensions that the floods may have taken approximately 60% of the rice harvest. But the first reports now suggest that only 4% of the total rice harvest is completely damaged and that an additional 7% is considerably damaged. Almost 16% of the rice harvest is partially affected by the flood, resulting in a loss of 10% of the yield in Punjab.
The floods affected more than a million acres of rice in the province. Northern divisions like Gujranwala and Gujrat have experienced the highest impacts of floods, while the damage caused by rain were more dispersed but included in quantified yield losses.
The total area of culture of rice in the country is around 6.5 million acres, the floods representing the greatest threat to production. No damage was reported at the end of August, indicating a quick escalation in a short period of time in September highlighting the vulnerability of the main regions of growth in Punjab rice.
The head of the IMF expressed his sympathy with all the people affected by the floods. It noted the importance of the evaluation of damage to support recovery priorities.
During his meeting with the director general of the IMF, the Prime Minister appreciated the long -standing constructive partnership of the IMF with Pakistan which, under the direction of Georgieva, had reinforced more, read a press release.
The Prime Minister has recognized the support of the IMF under various instruments, totaling about $ 11.4 billion in the past two years. “Today, with the institution of deeply rooted structural reforms, Pakistan’s economy shows positive stabilization signs and is now going towards the recovery,” said the Prime Minister.
The IMF chief congratulated the Prime Minister’s commitment to pursue solid macroeconomic policies and reiterated the continuous support from the IMF while Pakistan advances the economic reforms necessary to ensure long -term sustainable economic growth.
Cars
A meeting of the Economic Coordination Committee (ECC) of the Cabinet also took place on Wednesday. The ECC examined a summary concerning the commercial import of used vehicles and, after a detailed discussion, granted approval to proposals, according to the Ministry of Finance.
The ECC has decided to modify the relevant provisions of the order police order, 2022 to allow the commercial import of used vehicles.
Initially, only vehicles no more than five years will be authorized until June 30, 2026, after which the age limit of the vehicle must be withdrawn, he added.
The ECC also ordered that such a commercial import would remain subject to strict compliance with prescribed environmental and security standards.
The ECC has also approved the taxation of 40% of regulatory rights, in addition to existing customs duties, on the commercial import of used vehicles under five years. This improved obligation will remain applicable until June 30, 2026. Subsequently, the law will be gradually reduced by 10% per year, reaching zero by 2029-30, in accordance with the recommendations of the tariff policy board.
Sources have indicated that the IMF would carefully examine the performance of the FBR because it could not achieve many agreed objectives.
