Home Global Village Asad Umar: Talks with IMF to continue but no need to rush...

Asad Umar: Talks with IMF to continue but no need to rush into a deal


News Analysis |

Minister for Finance and Revenue Asad Umar has said that talks with IMF would resume through a video conference next week and the rumors of a delay in the parlays are baseless. He made these statements in an exclusive interview on Live with Moeed Pirzada, a top-tier show on GNN news channel, on 28th November, in Islamabad.

Responding to a question about the air of confusion regarding the negotiations with the International Monetary Fund for a bailout package, the Finance Minister said that Pakistan is reviewing multiple options and is in no hurry for the IMF package. He said that the delay can be attributed to the fact that the IMF’s vision for Pakistan’s economy differs with the government’s goals.

The Finance Minister said that the monthly deficit on external debts had been reduced from $2B to a little more than $1B which he also declared in his 100-day performance review ceremony speech.

He also said that the delay may be due to geopolitical reasons; however, Pakistan is not going to make any political bargain if that were true. Last week, speaking to Dr. Moeed Pirzada in an exclusive interview, the Minister for Foreign Affairs Shah Mehmood Qureshi had responded to questions on deadlock with the IMF and asserted that talks are continuing, however, his government is clear that if IMF’s priorities are purely economic – like reducing Pakistan’s fiscal deficit – then Pakistan and IMF are on the same page and can work together.

“However we will be worried if IMF has political priorities – other than economic – and they insist on imposing a certain political agenda over Pakistan.” In that case, its government’s responsibility to protect the livelihoods of poor Pakistanis and such a situation may compel the government to seek what he referred to as a “homegrown solution”, GVS earlier reported.

Read more: IMF assistance: more detrimental than beneficial for Pakistan

An article by Business Recorder, a Karachi based business publication, had brought forward the notion that the IMF deadlock existed due to the government not taking into account OGRA and NEPRA’s recommendations on electricity and gas tariffs. The Finance Minister denied the notion and said that there was hardly any discourse on gas tariffs. He admitted that there was only one conflict on the electricity recommendations on the industrial support package and that was due to the government’s rhetoric on import-export imbalance; the government aims to decrease imports and increase exports.

Regarding the narrative being spread about IMF negotiation contingent being inexperienced, the Finance Minister said that both contingents from IMF and Pakistan were comprised of experienced people who had dealt with IMF package negotiations in the past. He said that the IMF contingent was spearheaded by Harald Finger, a senior international economist, who was a part of the last IMF package negotiations.

Minister for Finance and Revenue Asad Umar has said that talks with IMF would resume through a video conference next week and the rumors of a delay in the parlays are baseless.

He also said that the Pakistani team comprised of at least three members who had dealt with IMF negotiations in the past. He also said that all matters pertaining to the IMF negotiations had been previously discussed with senior economists. Responding to another thin-air suspicion spread on the social media about IMF’s concerns on CPEC, the Finance Minister told the anchor that there has been no mention of CPEC or agreements with China and those rumors are baseless as well.

Dr. Moeed Pirzada enquired the Finance Minister of the questions arising about the bailout packages expected from UAE and China from the Prime Minister’s visits to either country in the past few months. Dr. Pirzada had enquired the same from the Foreign Minister Shah Mehmood Qureshi and the FM had responded with optimism that the loan from UAE would come through. Asad Umar said that he agreed with the Foreign Minister in hoping that the packages from UAE and China would come through.

Read more: What if the IMF says NO to Pakistan?

Speaking about the primary economic goals for the lower-income tier, Asad Umar said that the government’s focus is financing low-cost housing schemes, Small Medium Enterprises (small businesses) and the agriculture sector. He said that banks are currently charging 35-40% on loans to SME’s and the goal is to incentivize banks to bring these rates down to 20%.

He told Dr. Pirzada that in the National Financial Inclusion Plan, Pakistan Housing Authority had been established to cater to the housing projects and that he was involved in determining the financial structure. He said that the credit requirements by the state bank for housing loans had been relaxed for low-cost homes. He also said that the FBR has been instructed to create a fixed tax regime for low-cost housing developers which they had been demanding.

Responding to another thin-air suspicion spread on the social media about IMF’s concerns on CPEC, the Finance Minister told the anchor that there has been no mention of CPEC.

Regarding the Naya Pakistan Housing Scheme, the Finance Minister clarified that the web-portal based forms which were perceived as ballot forms were for data collection for feasibility reports for the housing authority. He said that the government has approved Rs. 5 Billion revolving funds for banks to loan finances for small houses at a 5% interest rate, a move which will benefit the common man whose affordability is Rs.05-0.6 million.

Read more: US eyes CPEC as IMF to visit Pakistan soon

The Finance Minister said that a housing scheme of 150,000 homes had been launched for government employees through the Government Employees Housing Association. He also said that an abandoned project of 10,000 homes by the Worker’s Welfare Association for laborers has been given the green signal. The Finance Minister said that the monthly deficit on external debts had been reduced from $2B to a little more than $1B which he also declared in his 100-day performance review ceremony speech.

Dr. Pirzada pointed out the 100-day ceremony was drawing criticism for not being explanatory in terms of achievements. Asad Umar admitted that there had been some communication faults in the conveyance of facts and perhaps periodic information on progress should’ve been fed beforehand. Addressing the ceremony, Asad Umar had said that Pakistan would not hide behind IMF anymore. He asserted that times were tough but the government had taken measures for the better and things were progressing.