ISLAMABAD (Kashmir English): The International Monetary Fund (IMF) has reached a staff-level agreement with Pakistan following the conclusion of negotiations on reviews of the country’s financial programs.
According to a foreign news agency, Pakistan could receive up to $1.21 billion after the agreement is approved by the IMF Executive Board.
Official Pakistani sources said the government is implementing the IMF program and has accelerated work on key structural reforms, including the privatization program.
The sources said efforts are also underway to reduce losses of electricity distribution companies and contain the accumulation of circular debt in the gas sector.
The latest development comes after Pakistan and the IMF concluded their negotiations on Wednesday.
However, sources said amendments to laws governing state-owned enterprises (SOEs) have emerged as a key condition for the release of the next tranche of around $1 billion.
According to the sources, the IMF has designated the legislative changes as a “prior action” for the upcoming tranche. The IMF has not yet issued a formal statement following the conclusion of the latest negotiations.
The Finance Ministry spokesperson has also not yet confirmed whether the government has agreed to the IMF’s condition regarding amendments to SOE laws.
Sources said that once a staff-level understanding is reached on the condition, the IMF Executive Board could consider approval of the next tranche after Parliament passes the required legislation.
The Executive Board meeting is expected to take place in late November.
The IMF has repeatedly urged Pakistan to bring laws governing various state institutions into line with the overarching SOE law and ensure that their management and governance structures follow international best practices.
Pakistan has previously missed several deadlines related to the required legal reforms, prompting concerns from the IMF mission during the latest negotiations.
Sources said Pakistan was required to amend the laws governing around nine to 10 state institutions that were found to be inconsistent with the central SOE law. Officials have been directed to complete the alignment process by mid-November.
In January, the government submitted amendments related to six state institutions to Parliament for approval, while legislation concerning three other institutions still requires further progress.
Finance Secretary Imdadullah Bosal recently informed the National Assembly Standing Committee on Finance that amendments would be introduced to the laws governing Port Qasim Authority, Gwadar Port Authority, Karachi Port Trust, State Life Insurance Corporation, National Bank of Pakistan and Pakistan Railways.
Meanwhile, Maryam Kiani, a Grade-20 officer at the Ministry of Finance, has been appointed as the new Senior Advisor to the IMF Executive Director for a three-year term. She will replace Saif Dogar in the position.
The latest agreement is expected to provide further financial support to Pakistan, subject to approval by the IMF Executive Board and the completion of the required conditions.
