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    Pakistan government runs into political storm as it works to obtain IMF loan

    GovernancePakistan government runs into political storm as it works...
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    Pakistan government runs into political storm as it works to obtain IMF loan

    Laws proposed by the government for Pakistan’s eligibility for the sixth tranche of lending have run into resistance from various quarters across the country. A hike in the price of petrol and high speed high-speed diesel has fueled public anger.

    The government on Sunday said it expected the International Monetary Fund (IMF) board to approve the next tranche of lending for Pakistan as soon as all the required actions were completed.

    “As soon as the prior actions are completed by Pakistan, which the government is pushing hard, the IMF board will consider it for approval,” a statement issued by the finance ministry said adding “IMF board can move whenever our actions are completed”.

    Principal to the ‘actions’ that the finance ministry statement alluded to was the introduction of the Finance (Supplementary) Bill 2021 and the State Bank of Pakistan (Amendment) Bill 2021. Both were due to be tabled in the parliament for approval end-December.

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    These would ensure clearance of the sixth review of IMF’s $6 billion Extended Fund Facility (EFF). This tranche is expected to be to the tune of US$ 1 billion. The IMF’s executive board is scheduled to meet for the purpose on January 12.

    Radio Pakistan said that “the government is pushing hard for completion of the required actions and has introduced the supplementary finance bill 2021 and State Bank of Pakistan bill 2021 in the National Assembly.

    But the proposed laws have run into resistance from various quarters across the country. There were loud protests, no sooner than Imran Khan’s Adviser on Finance hinted at ‘rationalisation of taxes’ to bridge the revenue gap in excess of Pakistani Rs. 450 billion. Nobody was prepared to an increase in revenues and electricity tariffs, reduction in circular debt, rationalisation of gas rates and complete autonomy to the State Bank of Pakistan.

    Loud protests

    “Obviously they ask how we are going to bridge the gap when we do not collect petroleum levy after targeting it at Rs. 600 billion in the budget,” the prime minister Imran Khan’s finance adviser, Shakat Tarin had said, following his meeting with IMF officials in December.

    The government began with increasing the base electricity tariff by an average Rs 1.39 per unit across the country, opening the floodgate for protests from across the political spectrum.

    The loudest protests came from the far-right political party, Tehreek-e-Labbaik Pakistan. The party organised a huge protest march after the finance adviser directed an increase in petroleum levy by Rs 4 per litre on petrol and high-speed diesel.

    Prime minister Khan’s opponents say that the deal with the IMF has lacked transparency all through.

     

    Image: Wikipedia

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