By Razia Desai
DUBAI May 12: The International Monetary Fund (IMF) staff mission held nine-day talks with the Pakistan Finance Minister Ishaq Dar and State Bank of Pakistan Governor Ashraf Wathra in Dubai from May 2 to review Pakistan’s Economic Fund Facility program.
Addressing the press from the Park Hyatt Dubai, Ishaq Dar’s initial demeanor suggested a positive review. He announced that the 11th tranche of $510 million is to be made available to Pakistan. Dar was keen to reiterate his plans for an ambitious Gross Domestic Product growth agenda of 4.7 per cent in the fiscal year 2016-17, aided, he said, by improved oil prices, increased investment and an improvement in energy supply.
According to Dar, the IMF’s mission head, Harald Finger, praised the Pakistan government’s efforts to improve macroeconomic stability with the “Asaan” State Bank schemes for the less affluent parts of the population.
“Pakistan is set to take off, it is just a matter of time,” Dar said.
“We are trying to strengthen regulatory mechanisms,” he told the press and officials, adding that that unifying of Pakistan’s three stock exchanges gave him hope that the single entity would now be able to re-join emerging markets.
Dar underlined how other than minor contributions from the U.S. and China, Pakistan has largely dealt with the burden of terrorism using its own resources. Given this background, he was happy to announce that structural benchmarks have been met, in spite of a weak cotton harvest and declining exports.
Whilst Finger had an easier time handling press queries, the finance minister was grilled on the collection of taxes. Although the official press release stated that: “The indicative tax revenue collection target of Rs 2105 billion was missed by only Rs3 billion,” Dar was asked if he would investigate those reported tax evaders named in the Panama Papers.
He responded that as Pakistan’s Prime Minister Nawaz Sharif has already asked the Chief Justice to set up an investigatory commission regarding the Panama Leaks, the matter was sub judice.
With average inflation being expected at 3 percent in the current fiscal year, as in previous years, Dar spoke of helping the downtrodden through the Benazir Income Support Program. This time around he also mentioned the education-Conditional Cash Transfers, currently targeted towards 1 million needy students.
With Dar and the IMF team expected to conclude a final review in August, perhaps most telling of all was the finance minister’s request that the closing talks be held in Pakistan. Whether this happens, remains to be seen but for now, the declared gross international reserve of $16.1 billion is expected to keep critics at bay.