Islamabad: Pakistan’s argument that its programme conditions delayed votes in Punjab and Khyber-Pakhtunkhwa rejected by the IMF on Thursday. IMF stated Islamabad has the power to reprioritize expenses or raise taxes to satisfy constitutional commitments.
The IMF’s resident representative, Esther Perez Ruiz, stated that Pakistan’s EFF-supported programme does not hinder constitutional activities.
For the second time in four days. The IMF has repudiated Pakistan’s allegation about interfering in topics beyond the $6.5 billion bailout package. Setting the record straight and refusing to support the ruling Pakistan Democratic Movement (PDM).
Afterward, The statement comes a day after the Election Commission of Pakistan postponed Punjab and Khyber-Pakhtunkhwa polls till October 8. ECP cited security and financial concerns for delaying elections.
Moreover, The statement also argues that Pakistan’s inability to meet its international and local constitutional duties.
“The IMF sets aggregate general government targets (aggregating across federal and provincial government levels). Within these there is fiscal space to allocate or reprioritise spending and/or raise additional revenues to ensure constitutional activities can take place as required”. Said Esther Perez.
Elections cost
Punjab and K-P elections cost the ECP Rs20.5 billion. By-elections for 93 National Assembly seats require Rs5 billion. Compared to the amended fiscal year budget of Rs11.2 trillion, the ECP needed Rs25.5 billion. 0.18% of the federal budget is needed.
The IMF resident representative clarified that Pakistan’s institutions decide the constitutionality, practicality, and timing of provincial and general elections.
To avert diesel payment default to Kuwait, the Economic Coordination Committee of the Government authorised Rs27 billion supplemental funding this week. The minister for planning introduced Rs150 billion politically-oriented youth development projects two days ago.
Afterward, The ECP quoted the federal secretary finance in its elections postponement order.
“Secretary Finance while briefing the Commission stated that due to the paucity of funds and financial crunch, the country is facing an unprecedented economic crisis and it was under compulsion by IMF programme which has set targets for fiscal discipline and deficit, and it would be difficult for Government to release funds now for general elections to the provincial assemblies of Punjab, Khyber-Pakhtunkhwa and later for General Elections to National Assem.
The ECP added that the federal government has stated that due to the country’s dire economic position, it will be difficult to fund the elections and staggered polls.
Segregated elections cost Rs9.3 billion.
The federal cabinet updated the budget forecasts to Rs11.2 trillion last month, up 17% from eight months earlier.
Provincial surpluses reduced down to Rs559 billion from Rs750 billion in the budget. Hence, the estimated deficit is Rs5.7 trillion, or 6.8% of GDP.
The major deficit objective for the government’s programme is Rs465 billion, or 0.5% of GDP, up from Rs153 billion.
This month, Prime Minister Shehbaz Sharif offered Rs73 billion free wheat flour programmes in two provinces where constitutional elections are delayed.
Afterward, These provincially supported schemes cost roughly three times more than having elections in two provinces.
The Rs73 billion wheat flour subsidy may jeopardise the newly negotiated fiscal framework with the IMF, which demands Rs559 billion provincial cash surpluses. K-P notified the prime minister that it did not have Rs19 billion to support the free wheat flour scheme, sources added. 5.7 million province families will receive free wheat flour.
Moreover, The IMF has rejected Pakistan’s coalition government twice in four days. “I want to be categoric that there is absolutely no truth to this or any insinuated link between the past and the current IMF-supported programmes and decision by Pakistani government over its nuclear programme,” said Esther Perez.
Moreover, According to the IMF’s country chief, programme discussions had exclusively focused on economic solutions to fix Pakistan’s economic and balance of payments difficulties.
Pakistan and the IMF remain stalled owing to non-fulfillment of $6 billion additional loans and interest rate hike conditions.
