Pakis Living From Paycheue To Paycheque: IMF Approves $ 497 Million Tranche For Pakistan After Bail Out Review
ISLAMABAD: The International Monetary Fund (IMF) said on Thursday it had agreed to release a $497 million tranche for Pakistan after the latest review of a bailout package awarded in 2013, though the disbursement still requires IMF board approval. (so the "paycheque" has not yet been deposited "into the account" )
Addressing a press conference alongside IMF Mission Chief Harald Finger, Finance Minister Ishaq Dar reiterated the government's resolve to "convert loss-making state-owned enterprises into profitable enterprises".
He denied that the government had "rolled back" on its plans to save state-owned institutions,( and in the process using the police to kill protesters like in the PIA standoff) saying, "We will do everything possible to bring structural changes to make sure bleeding is stopped." (but what about the "bleeding" due to nepotism, corruption,at the highest level !)
An IMF loan helped Pakistan stave off a default in 2013, when dwindling foreign exchange reserves covered less than six weeks of imports.
Pakistan's reserves have since swelled to $20.5 billion in January from $11bn in mid-2013.( no mention of the corresponding "debt swelling" and the burden to future generations of (madrassah) educated Pakis )
Earlier today, the ministry of finance denied reports that IMF officials were angered at Pakistan's lack of progress concerning privatisation of power companies and other state-owned entities.
"The Reuters story is not true, we are sorry to see them carrying the story," stated the secretary of finance.
Reuters had earlier reported that Pakistan has shelved plans to privatise its power supply companies and will miss deadlines to sell other loss-making state firms, reneging on promises Islamabad had made to the International Monetary Fund (IMF) in return for a $6.7 billion bailout three years ago.
Two government officials with direct knowledge of the situation said IMF officials meeting with Pakistani officials in Dubai this week were angered by the backtracking, but they expected the IMF would still release the remaining $1.6 billion to be disbursed.The "too big to fail nuclear blah blah argument" to support this "artificial entity"
“It was embarrassing and brutal,” a senior Pakistani official present at the meeting in Dubai, told Reuters, describing the IMF's response when mission head Harald Finger was told that the government had decided not to sell nine power distribution companies because of fear of labour unrest.
“It was nothing less than a dressing down. If the IMF still doesn't penalise us, then all I can say is, 'We're very lucky,'” the official said.
The other source, a senior finance ministry official who was also in Dubai, confirmed the account.So the fate of Pakiland is not decided in Pakiland but in Dubai of all places. Security concerns for the IMF ?
Both Pakistani officials said the IMF had made clear its frustration with the delays to privatisation drive.
"The IMF is asking the obvious question: 'Why didn't you start negotiations [with unions] earlier? Why wasn't this handled better at the political level?'" the senior government official said.(IMF needs a 24/7 physical presence in the Finance And Other Ministries to monitor each dollar given to them )
The Pakistani officials told the IMF that taking on the power companies' 400,000 unionised employees was fraught with risk, and that instead the government would bring in independent boards of directors to improve management. (who will "bell" the cat
Privatisation of loss-making enterprises
The privatisation of 68 state-owned companies, which include loss-making enterprises like Pakistan International Airlines and Pakistan Steel Mills, is a crucial part of the IMF deal and was meant to bring the country's finances back on track.
Such enterprises drain about $5 billion every year from state coffers, around an eighth of the government's fiscal revenues last year of around four trillion rupees ($38.2 billion).
The government has made some progress, including raising more than $1 billion by selling its entire stake in Habib Bank Ltd, but has struggled to find buyers for most of the companies and faced stiff opposition from labour unions.
Prime Minister Nawaz Sharif on Monday invoked the Essential Services (Maintenance) Act 1952 for six months, barring protesting members of the Pakistan International Airlines from participating in any union activity.
The strike, however, were not halted. While flight operations were initially on schedule, they were also halted across the country following the deaths of PIA employees Inayat Raza and Salim during Monday's protest.Stuck between a rock and a hard place, as the cliche goes
- cross posted from STUP thread !