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IMF, Pakistan reached an agreement to spend around USD 500 million | Instant News


The IMF agreed in 2019 to provide Pakistan with USD 6 billion under an Extended Fund Facility (EFF) arrangement for 39 months, but that was disrupted due to last year’s Covid-19 pandemic.

PTI, Islamabad

UPDATED ON FEB 16, 2021 22:47 IST

The International Monetary Fund (IMF) and cash-strapped Pakistan on Tuesday struck a deal on reforms that pave the way for a $ 500 million payment as part of a revival of a stalled bailout program, the finance ministry said.

The IMF agreed in 2019 to provide Pakistan with USD 6 billion under an Extended Fund Facility (EFF) arrangement for 39 months, but that was disrupted due to last year’s Covid-19 pandemic.

Financial Advisor Dr Abdul Hafeez Shaikh announced on social media that the agreement was reached at a kiosk level meeting between the two parties.

“I would like to convey that the Government of Pakistan has reached a staff level agreement with the IMF. Overcoming the challenges created by the pandemic requires concerted efforts,” he tweeted.

The advisor called it a “good development for Pakistan”, while thanking Prime Minister Imran Khan and IMF staff for their support.

An IMF team led by Ernesto Ramirez Rigo concluded virtual discussions with Pakistani authorities and reached a staff-level agreement on a second to fifth review of the authorities’ reform program, according to an IMF statement.

It said the agreement struck the right balance between supporting the economy, ensuring debt sustainability and advancing structural reforms.

“Awaiting the Executive Council’s approval, the finalization of the review will be released around USD 500 million,” said the IMF.

He also said that Pakistani authorities are committed to ambitious policy actions and structural reforms to strengthen economic resilience, promote sustainable growth and achieve the EFF’s medium-term goals.

The fiscal support program is key for Pakistan to win international confidence in its economy which is struggling to escape the effects of the pandemic.

Despite the lull in the bailout package, the IMF provided Pakistan with USD 1.4 billion in emergency funding to support it to reduce the economic impact of Covid-19.

For the first time in 68 years, Pakistan’s economy has contracted in the coming fiscal year by negative 0.38 per cent due to the adverse effects of the Covid-19 pandemic coupled with an already weak financial situation before a deadly infection hit the country.

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The Karachi Transformation Plan will be presented before the ECC for approval | Instant News


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ISLAMABAD: Federal Finance Minister Abdul Hafeez Shaikh will chair the Economic Coordination Committee (ECC) meeting on Thursday (tomorrow) where the Karachi Transformation Plan will be presented before the meeting for approval, ARY NEWS reported.

The ECC meeting on Wednesday was postponed and tomorrow’s meeting will discuss a 10-point agenda including the Karachi Transformation Plan, which had been suspended in the committee’s two previous meetings.

The meeting will also approve a technical grant of Rs 500 million for the Ministry of Housing, as well as approval for the issuance of a US $ 500 million Euro Bond for the construction of Mohmand and Diamer-Bhasha Dams.

The port and shipping ministry will present a proposal to establish a new terminal based on BOT before the committee where changes in the master plan will be made for the construction of the new terminal.

The ECC agenda also includes approval for the gas company LPG Air Mix and loan payments drawn from GIDC for gas imports.

In the last ECC Cabinet, the Cellular Device and Electric Vehicle Manufacturing Policy was Approved for two and three wheeled vehicles.

The approval was granted at an ECC meeting chaired by Minister of Finance and Revenues Abdul Hafeez Shaikh in Islamabad.

The forum approved the elimination of a 4 percent tax cut on manufacturing for retailers of locally produced phones and an elimination of Sales Tax on locally produced phones.

The Ministry of National Food Security presented a summary for supplying additional quantities of wheat to the Azad Jammu and Kashmir Government and the Utility Shop Company.

The Minister of Finance aims to deliver the first load of additional quantities to AJ&K and USC with priority as an interim arrangement to ensure smooth supply of wheat throughout country.

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ECC is expected to give approval for Karachi’s transformation plan: source | Instant News


ISLAMABAD: Advisor to Prime Minister of Finance Abdul Hafeez Shaikh will chair a meeting of the Economic Coordination Committee (ECC) on Wednesday (tomorrow) to discuss the 10-point agenda, ARY News reported.

In an upcoming meeting, the ECC is likely to approve the Karachi transformation plan announced by Prime Minister Imran Khan in September, sources told ARY News.

The prime minister has announced a ‘historic’ financial package of Rs1100 billion for the implementation of a transformation plan intended to address city problems and development requirements.

The committee will discuss recommendations for ending import duties on cotton import regulations aimed at bringing in raw cotton. The company will also consider providing Regasified Liquefied Natural Gas (RLNG) for the export sector at a discounted price.

Read: PM Imran launched a package of Rs1.1 trillion for rain-stricken Karachi

The agenda also includes decisions on exemption from national highway loans; supply of imported sugar to state-owned utility stores; supplying gas supplies to Pakistan Steel Mills.

A summary will be submitted to the committee for the repair work of the Islamabad High Court (IHC) building and the supply of gas to the Sui Southern Gas Company (SSGC) from the Benari field in addition to approving the gas supply according to its target. The ECC is also expected to approve gas supplies from third party companies or exploration companies.

In a previous meeting, the Economic Coordination Committee (ECC) has approved additional technical grants for advance purchase of the COVID-19 vaccine.

Read: The ECC approved an additional grant to purchase a COVID-19 vaccine

ECC members are considering a six-month extension of interest payments on loans obtained from G20 countries and issues related to gas supply to Engro Fertilizers. The committee members approved the gas supply to Engro Fertilizers.

In addition, the committee has granted permission to Punjab province to import 340,000 tonnes of wheat through the Trading Corporation of Pakistan (TCP).

Sources told ARY News that the committee has allocated funds for the payroll of Pakistan Steel Mills (PSM) workers; an additional technical grant of Rs500 million for the ministry of education; budget approval of Rs683.3 million for the National Information Technology Agency (NITB).

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Meeting on FATF, round debt was canceled due to lack of quorum | Instant News


ISLAMABAD:

The Standing Committee meeting of the National Assembly on Finance, held to discuss two pressing issues of Pakistan – the Financial Action Task Force (FATF) and increasing circular debt, must be canceled due to the lack of interest shown by the finance ministry and committee members.

Standing Committee Chair Faizullah Kamoka and two other lawmakers waited more than 30 minutes for at least three committee members and senior finance ministry officials to begin the process.

Neither MPs nor Financial Adviser Dr. Abdul Hafeez Shaikh, senior finance ministry officials and Industry Minister Hammad Azhar were not present to attend the meeting.

“We have no choice but to cancel the meeting because there are no members and officials related to the ministry,” Kamoka said, closing the meeting before it could even officially begin. Of the 21 members, only three came to attend the meeting, including Kamoka. The other two members are PML-N Ali Pervaiz and Faheem Khan from PTI.

Due to the absence of financial advisors from the standing committee meetings, the committee has unanimously decided not to discuss the legislative agenda of the finance ministry until the de facto finance minister personally attends the meeting.

However, this time the entire hierarchy over the finance ministry was lost from the meeting.

The budget of the joint secretary – a class-20 officer – comes from the finance ministry to attend the meeting despite having five agenda items related to the ministry, including four proposed laws. This is related to government savings schemes and transactions guaranteed by financial institutions.

“Senior ministry officials did not miss the committee meeting that was formed by choice, because at the same time Prime Minister Imran Khan took a briefing on the subsidy regime,” Finance Secretary Naveed Kamran Baloch told The Express Tribune.

The direction of the minister for economic affairs on the FATF issue was also on the committee’s agenda. But the briefing must be given by Hammad Azhar, Kamoka said.

Azhar has asked to postpone the briefing because of his other involvement with the prime minister, the chairman said. Azhar is an important government person on the FATF issue.

FATF has given the September 2020 deadline to Pakistan to comply with the 27-point action plan. The federal government is in the process of meeting the remaining legal requirements and the cabinet on Tuesday is expected to approve new amendments to the 2017 Companies Act to meet FATF requirements.

The Pakistan Securities and Exchange Commission (SECP) has proposed amendments to the Company Law aimed at banning the issuance of bearer shares, bearer stock warrants and similar securities or bearer debt securities, as well as ways of registration and cancellation if any such securities have been issued. This amendment aims to prevent misuse of companies from money laundering or misuse of terrorist funds in line with recommendations issued by FATF.

The Pakistan Joint Evaluation Report issued in October 2019 by the Asia Pacific Group on Money Laundering also highlighted certain deficiencies in the regulatory framework relating to misuse of carrier shares and carrier stock warrants.

The government has proposed a new amendment to keep a record of key beneficiaries to ensure compliance with recommendations issued by FATF to increase company transparency. SECP has also proposed amending the Limited Partnership Act, 2017 to meet FATF requirements.

The finance secretary should also give guidance on circulars to standing committees, according to the agenda of the meeting.

Circular debt, which was less than Rs1.15 trillion at the end of the PML-N term, had surprisingly jumped to more than Rs2.2 trillion. The Power Division has failed to hold back the debt that now threatens the country’s fiscal framework.

Amendments to the Post Office Cash Certificate Act and the 2020 Government Savings Bank Act (Amendments) are also on the committee’s agenda.

Published in The Express Tribune, 21 Julyst, 2020.

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Budget financial advisors talks led by Corona | Instant News


The PM’s aide said the upcoming budget was to focus on reducing the suffering of people through various steps

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The PM’s aide said the upcoming budget was to focus on reducing the suffering of people through various steps. PHOTO: APP / FILE

ISLAMABAD: The country’s de facto finance minister said the upcoming budget would be formulated keeping in mind the impact of the coronavirus pandemic on people and businesses and would aim to reduce their suffering.

“This is a corona budget, so we want to reduce the suffering of our people and give them hope, give them cash, food products, and re-create employment opportunities for them,” Prime Minister of Finance Adviser Dr Hafeez Shaikh said while talking to the TV channel on Wednesday.

“The government hopes to meet people’s budgetary expectations,” he added.

The adviser said the federal government would present a budget for fiscal year 2020-21 in parliament in the first week of June 2020, with a special focus on mitigating the suffering of the people through various steps and creating employment opportunities for them.

He said in the previous budget, the PTI government had taken austerity measures, adding that there was still a need for spending to be made in a better way to ensure that public money was not wasted.

The Ministry of Finance plans Rs600b PSDP for the next fiscal

“Now public money will be spent in such a way that the suffering of people with problems can be reduced. This is a great economic principle that through government spending, money is in the hands of people who help generate economic activity and job creation and help in dealing with recessions. “

He said the budget for the coming fiscal year would also feature a balanced tax collection approach and the government would adopt a strategy for economic documentation. However, it will not be so strict that it causes business suffering.

Shaikh said the government would try its best to raise taxes fairly to help economic growth.

“With provincial consultations, policies will be introduced to increase agricultural productivity, promote industry and exports.

“However, the private sector must play a big role, because the government can only make policies and provide a conducive environment for their business or provide subsidies from limited resources.

“The real players are entrepreneurs, investors, exporters, workers and farmers,” he added.

The adviser said the country must focus on improving business relations with other countries because no country in the current era can advance on its own. He also underlined the need to increase exports, reduce imports and also provide incentives for expatriates to invest in Pakistan.

He said the government made economic policies for public goods and added that the State Bank of Pakistan (SBP) had reduced the level of policy while the government had also announced an aid package with the basic aim of ensuring that economic activity was not much affected by the pandemic. .

He stressed the need to strike a balance between health and economic activities, saying the government must protect people from the effects of Covid-19 and at the same time he must save the country’s economy.

He said Prime Minister Imran Khan had repeatedly emphasized taking steps with wisdom so that economic activity was generated but not at the expense of health.

“After going through difficult times now in a few months, the focus of the government is to strengthen long-term economic trends, to ensure the welfare of the people,” he said.

(With input from APP)

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