Unplanned electricity subsidies in Punjab are another major hurdle in Pakistan’s $7 billion bailout package with the International Monetary Fund (IMF).
According to the report, the Executive Director of the Sustainable Development Policy Institute Dr. Abid Silhari said on the occasion of the seminar that the government should take the IMF into confidence on the electricity subsidy announced at the federal and provincial levels.
Dr. Abid Silhari pointed out that the federal and Punjab governments may have genuine intentions to subsidize electricity, which may surprise the IMF and affect the loan approval by the Executive Board.
The IMF has already asked Pakistan to take a $12 billion loan extension from friendly countries.
He emphasized that international financial lending institutions do not like such things because they can eliminate the terms and procedures contained in the agreements.
He said that the IMF should not be surprised but should take it into confidence as the fund has asked consumers to charge the full price of electricity and there is no change possible after the staff-level agreement was reached in July.
However, diplomatic sources in Washington told Dawn that Pakistan is not on the IMF’s calendar till September 18 but that does not mean the country is off the fund’s agenda.
The IMF calendar lists upcoming Executive Board meetings to address issues such as member countries’ requests for new aid packages. Since all Board members participate in these discussions, meeting organizers must distribute the mandatory agenda and related documents at least two weeks before any scheduled meeting.
However, IMF sources have clarified that not all meetings are included in the calendar, for example, in the second week of April, the IMF published the schedule of Executive Board meetings on its website, including Pakistan. was not
Dr. Abid Silhari said that the federal and Punjab governments have given subsidies on energy, which will be managed through annual development plans and cuts in various financial sources.
It should be noted that on July 13, a staff-level agreement was reached between the IMF and Pakistan for a $7 billion loan program, which will last for 37 months, but it is subject to the approval of the IMF Executive Board.
