IMF delegation concludes Pakistan visit, notes progress in key areas

The seal of the International Monetary Fund (IMF) is seen outside of the headquarters building in Washington, DC on April 8, 2019. (AFP/File)
Updated 21 September 2019

IMF delegation concludes Pakistan visit, notes progress in key areas

  • The mission observed "significant improvement in tax revenue collections"
  • Says government's monetary policy is helping to control inflation

ISLAMABAD: Pakistan’s economic program is off to a promising start, but decisive implementation is critical to pave the way for stronger and sustainable growth, said the IMF mission after concluding their visit to Pakistan on Friday.

A full IMF mission will return to Pakistan in late-October to conduct the first review under the $6 billion Extended Fund Facility (EFF), the mission added.

An IMF mission, led by Ernesto Ramirez Rigo, visited Islamabad and Karachi during September 16–20, 2019 to take stock of economic progress and discuss progress in the implementation of economic policies. 

“While the authorities’ economic reform program is still in its early stages, there has been progress in some key areas," a statement issued by the mission read.

The IMF delegation acknowledged that "the transition to a market-determined exchange rate has started to deliver positive results on the external balance, exchange rate volatility has diminished, monetary policy is helping to control inflation, and the SBP (State Bank of Pakistan) has improved its foreign exchange buffers."

“There has been a significant improvement in tax revenue collections, with taxes showing double-digit growth net of exporters refunds," the statement read. 

The visiting delegation of the Fund also noted that "FBR is undertaking significant steps to improve tax administration and its interface with taxpayers" and said that "Importantly, the social spending measures in the program have been implemented."

“The near-term macroeconomic outlook is broadly unchanged from the time of the program approval, with growth projected at 2.4 percent in FY2019/20, inflation expected to decline in the coming months, and the current account adjusting more rapidly than anticipated. However, domestic and international risks remain, and structural economic challenges persist. In this context, the authorities need to press ahead with their reform agenda," the IMF delegation noted.

Pakistan to be part of new Saudi foreign manpower program 

Updated 14 November 2019

Pakistan to be part of new Saudi foreign manpower program 

  • New skills-based system to be launched from next month
  • Will include India, Philippines, Sri Lanka, Indonesia, Egypt, Bangladesh, and Pakistan

ISLAMABAD: Starting next month, Saudi Arabia will introduce a new skilled foreign manpower program that will eventually include Pakistan, a senior official at the Saudi labor ministry said this week. 

Nayef Al-Omair, head of the vocational examination program at the Ministry of Labor, said on Tuesday in Riyadh that the ministry was categorizing the tasks and the structure of some professions for visa-issuing purposes.

Under the new policy, visas would be issued only after skill tests and the previous system would be gradually phased out. 

The new scheme would be optional for one year starting December 2019 after which it would become compulsory, Al-Omair said. The new program would first be applied to manpower recruited from India due to its large size in the Saudi market.

Eventually, the program will cover seven countries, including India, the Philippines, Sri Lanka, Indonesia, Egypt, Bangladesh, and Pakistan. Workers belonging to these states constitute 95 percent of professional manpower in the Kingdom’s local market.

Saudi Arabia is home to around 2.6 million Pakistani expats those have been a vital source of foreign remittances.

Last year the country received $21.8 billion in remittances out of which $5 billion were remitted by Pakistani nationals working in Kingdom.

According to the Pakistani ministry of finance, there was a major decline in manpower export to Saudi Arabia where only 100,910 emigrants proceeded for employment in 2018 as compared to 2017, a drop of 42,453 emigrants.

However, Sayed Zulfikar Bukhari, special assistant to the Pakistani prime minister on overseas Pakistanis, said in an interview earlier this month that Saudi Arabia had agreed to increase the share of the Pakistani labor force in the multi-billion dollar New Taif City development.

Pakistan and Saudi Arabia have formed working groups to develop procedures for this transfer of manpower. Pakistani groups will visit the Kingdom in the coming months to finalize arrangements.