Ishaq Dar

IMF approves $497 mn tranche for Pakistan, Dar says privatisation remains top priority

DUBAI (Reuters) – Economic reforms including privatisation remain a top priority of Pakistan’s government and it plans to make up delays in selling off state firms in the energy sector, Finance Minister Ishaq Dar said on Thursday.Dar was speaking at a news conference in Dubai after the International Monetary Fund said it had agreed to release a $497 million tranche for Pakistan after the latest review of a bailout package awarded in 2013, leaving a further $1.1 billion left to be released.Ishaq Dar said the government had held meetings with unions on the airline privatisation and planned to push the plan forward.He described the unrest as politically motivated.Earlier on Tuesday, protesters clashed with security officials over plans to privatise Pakistan International Airlines, leaving two people dead. Most PIA flights were grounded on Wednesday.

Ishaq Dar told reporters that the government is working to enhance the GDP growth of the country to five percent. He said that Chemical, Fertilizer and automobile sectors growth has witnessed increase.He said the inflation has been reduced to 2.1 percent, which is lowest during the last twelve years.He said all indicators of the economy are positive due to prudent policies adopted by the Government. He said that the Foreign exchange reserves have crossed 20 billion dollars.He further assured that the government is strictly working on Fiscal discipline.Dar said that the country is achieving economic targets not on time but before due time. He said that Pakistan‘s economy is prospering despite the challenges it is facing from the region.The government is working on different energy projects and loadshedding will be ended by 2018, he added.

To a question, he said that over all law and order situation in the country has improved.About the PIA issue, the Finance Minister said some elements are misleading the masses about PIA privatization. He pointed out the fleet of the PIA has increased to forty with the induction of new jets.Earlier today, Announcing that its team in Dubai had agreed that the tranche should be disbursed, subject to approval by the Fund’s executive board, the IMF lamented Pakistan’s slow progress in some areas.”While many structural benchmarks have been met, measures pertaining to the energy sector reform and restructuring of loss-making public enterprises are yet to be implemented,” the IMF said in a statement.

The IMF loan had 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 $11 billion in mid-2013.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 BankLtd, but has struggled to find buyers for most of the companies and faced stiff opposition from labour unions.

Pakistan has already missed last year s deadlines to solicit buyer interest in PIA, and the officials said the government has now informed the IMF it would miss the June 2016 deadline to conclude the sale of 26 percent shares of the airline.Pakistan will also miss its deadline to sell Pakistan Steel Mills by March this year, the government officials said.


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