Islamabad: Saudi Arabia will give 2 billion dollars to Pakistan, which has also been confirmed by the IMF, but funding from the United Arab Emirates is also awaited and eyes are focused on deposits of an additional one billion dollars.
On the other hand, the subsidy on fuel is an obstacle to the agreement with the IMF, sources say that the cheap petrol proposal will have to be terminated, while the government has not yet prepared any strategy.
On the other hand, Minister of State for Finance Ayesha Ghos Pasha said that a staff level agreement with the IMF will be concluded after the conditions regarding external funding are met.
The World Bank, while releasing its report on Pakistan’s development, recent economic growth and related concerns, has said that if Pakistan wants to reduce expenditure, it should end subsidies on electricity and petrol, Pakistan can achieve ‘sustainable growth’ only through economic reforms. Apart from maintaining dual ministries and departments, completing provincial projects with resources under the federal government is causing a loss of 800 billion rupees annually.
According to the details, after the possibility of getting an additional two billion dollars in the form of deposits from Saudi Arabia, Pakistan is now waiting for a response from the United Arab Emirates regarding receiving another billion dollars in order to have a staff level agreement with the IMF.
Senior government officials have told The News that the IMF has told the Pakistani authorities that they have received an assurance of $2 billion from Saudi Arabia and the IMF is satisfied with the assurance.
It is expected that the Saudi authorities will make an official announcement in this regard on the occasion of Prime Minister Shahbaz Sharif’s visit to Saudi Arabia.
The Pakistani ambassador in Saudi Arabia pointed out that Saudi Arabia has always helped Pakistan in difficult situations and God willing, good news will come out soon.
All eyes are now on the United Arab Emirates to secure an additional $1 billion in deposits, which would then lead to an agreement with the IMF.
The Ministry of Petroleum, after consultation with the Prime Minister’s Office, had announced that fuel subsidy would be given to motorcyclists and cars up to 800 cc. However, this proposal will have to be dropped for now.
According to sources, the government has not yet prepared any strategy in this regard.
In the past, similar schemes were considered during the tenure of Finance Minister Shaukat Tareen, even former Finance Minister Miftah Ismail talked about starting a cheap petrol scheme by allocating 48 billion in the budget, but it was not implemented.
It is expected that Finance Minister Ishaq Dar will hold talks with IMF and World Bank officials in the future, but the final date of the talks has not been revealed so far.
It remains to be seen how the negotiations between Pakistan and the IMF regarding the Expanded Fund Facility progress even though the 9th review has been completed while the expansion program ends on June 30, 2023.
It is likely that the program will be extended for three to six months, but so far there has been no talk in this regard.
On the other hand, the World Bank, while releasing its report on Pakistan’s development, recent economic growth and related concerns, has said that the expenditure should be reduced by reducing the provision of traditional regressive subsidies, Pakistan’s ‘sustainable growth’ can only be achieved through economic reforms. can do.
According to an estimate of the World Bank, in addition to maintaining the same dual ministries and departments, the completion of provincial projects with resources under the federation is causing a loss of 800 billion rupees annually, according to which the Higher Education Commission has been maintained. While provincial projects are being completed from the Public Sector Development Program which is allocated from the federal budget.
According to World Bank economists, the said loss is one percent of GDP.
He said that even after the transfer of the powers of the eighteenth constitutional amendment to the provinces, the losses have been estimated at 320 billion rupees on an annual basis.
70 billion annually by continuing HEC and 315 billion annually by completing provincial projects under PSDP is estimated.
70% of the expenses in the form of salaries, pensions, expenses, compensation and interest payments of the employees, despite the eighteenth constitutional amendment, often the expenses which are of a provincial nature are also borne by the federation.
The World Bank report has said that government staff and operational costs should be reduced through austerity.
Freeze top- and middle-level hiring and wages, while modestly raising wages as needed at the bottom and reducing pension costs with reforms.