Pakistan resolves to revive IMF program

January 20, 2023

Pakistan said it wanted to continue the program with the International Monetary Fund (IMF) in such a way that ordinary people should not bear the burden of tough decisions to be made as per the Fund’s conditions. While talking to the media after attending a meeting of the Senate Standing Committee on Finance, Minister of State for Finance and Revenue Ayesha Ghaus Pasha said that the government’s economic team was having meetings with the prime minister to focus on its program with the IMF.

She said the government was not in favour of taking tax measures across the board that could put an extra burden on the poor and ordinary people. She said the government would try to convince the IMF about the worst situation in Pakistan after the disastrous floods last year. “The people are already suffering due to disastrous flooding, and they are not in a position to afford any further burden,” she said.

Earlier, while briefing the Senate Committee on Finance, Ayesha said Pakistan was facing an extraordinary situation.A representative of the Pharmaceutical Manufacturing Association briefed the committee that the pharmaceutical industry has a potential to grow to $6billion. He said that this industry imports 93% of raw material, and the remaining 7% is also ordered from India. However, he complained that the letters of credit (LCs) for imports are 100% closed.

“We have made advanced payments, but still the LCs are not issued,” he said, adding that all the banks are saying that they don't have dollars.Ayesha said Pakistan was facing a current account deficit and normalisation of the situation will take time. “We have instructed the banks to open necessary LCs,” she added.

However, she clarified that non-issuance of LCs doesn’t mean that the country is going to be bankrupt. She said LCs related to essential food items, energy, pharmaceuticals, and agricultural products will be opened.“We are trying our best to increase foreign exchange reserves, but it takes time,” she said. The Senate committee directed the State Bank of Pakistan (SBP) to immediately open LCs for the pharmaceutical industry.

Credit : Independent News Pakistan-WealthPk