IMF says bailout program to get Pakistan out of boom and bust cycle

In this file photo, the International Monetary Fund (IMF) headquarters building is seen ahead of the IMF/World Bank spring meetings in Washington, US, April 8, 2019. (REUTERS)
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Updated 24 December 2019

IMF says bailout program to get Pakistan out of boom and bust cycle

  • Pakistan met 6 performance criteria, missed 5 indicative targets — IMF report
  • Slow growth rate may spark agitation in the country, analysts

KARACHI: International Monetary Fund IMF on Tuesday said with the achievements of all the performance criteria set for the first quarter the fund’s bailout program now moves to the structural reforms to get the country out of boom and bust cycle.
“We see that the authorities remain strongly committed to all the objectives of the program. We are now at the stage in the program where we move to the area of structural reforms. These are really important to build an institutional framework for the country so that there is no repetition of the boom bust cycles of the past,” Ramirez Rigo, Mission Chief for Pakistan at International Monetary Fund, said in a conference call.
The IMF mission chief identified the three areas for continued progress that Pakistan needs to focus including the quality of the fiscal adjustment that will require continued work on the tax revenue side, energy sector reforms for more automaticity capacity implementation by legislation for National Electric Power Regulatory Authority (NEPRA), and the independence of central bank.
The fund on Monday released report of the first review of the bailout program under which it agreed to extend $6 billion to Pakistan. The IMF has documented progressed made by the authorities and revised targets including the revenue collection target for current fiscal year.
Islamabad had targeted Rs 5.5 trillion tax collection for the current fiscal year FY20 through Federal Board of Revenue FBR but the fund projects agency’s tax collection would be Rs 5.238 trillion, showing a reduction of Rs 265 billion.
The report highlights that the country has met around 6 performance criteria while two are continuous and the Islamabad has missed 5 indicative targets that include cumulative floor on targeted cash transfers spending Benazir Income Support Program (BISP) as only Rs 5 billion were released against target of Rs 45 billion.
Real GDP growth is projected at 2.4% in FY 2020, but net exports are now expected to provide a larger contribution to growth mainly due to greater import compression. Growth is projected to strengthen to around 3% in FY 2021, and 4.5–5% over the medium-term.
Average CPI inflation is projected to decelerate slightly to 11.8 percent in FY 2020 as administrative and energy tariff adjustments are expected to offset the effects from weak domestic demand.
The Fund views that the Pakistan has made progress on Anti-Money Laundering and Combating the Financing of Terrorism AML/CFT deficiencies, although much remains to be done. With assistance from capacity development providers (including the IMF), the authorities are committed to completing the actions in the structural benchmark by end-June 2020.
Analysts say the funds appraisal is positive for Pakistan though some targets were missed. “We believe overall IMF’s staff appraisal is positive, though some indicative targets were missed. In fact, on some accounts (like Net international reserves (NIR), Net Domestic Assets (NDA),budget deficit), the authorities have achieved over performance,” Muhammad Sohail, senior financial analysts and CEO of Topline Securities, said.
Economists say the fund has identified the important area where if the government fails to focus the situation may lead to agitation. “The IMF has reported that the job creation is need which has been hampered by the slowing growth. The fund has expressed its concerns that it could lead to agitation as you already see due to inflation. The solution they have provided is that they have suggested to increase the allocation for development spending to create more jobs,” Dr. Vaqar Ahmed, Joint Executive Director of Sustainable Development Policy Institute (SDPI), told Arab News.
The IMF will hold the next review of the bailout program from March 6, 2020 for the disbursement of another $452.4 million tranche.


Pakistani short film released today to commemorate life under siege in disputed Kashmir

Updated 05 August 2020

Pakistani short film released today to commemorate life under siege in disputed Kashmir

  • ‘Article 370’ is directed by Ibrahim Baloch and tells story of a Kashmiri woman who waits for her husband to return home after India imposes lockdown in disputed Kashmir
  • Article 370 of India’s constitution granted special status to Jammu and Kashmir, providing a semblance of autonomy to the region

KARACHI: Pakistani writer and film director, Ibrahim Baloch, is poised to release a short film on Wednesday about a married Kashmiri woman whose life is shattered after the administration in New Delhi abrogates Article 370 of the Indian constitution on August 5, 2019 and strips the disputed Kashmir region of its autonomy, putting the region under lockdown.

Talking to Arab News, Baloch said he wanted to release the film, ‘Article 370,’ on the first anniversary of India’s unilateral decision to integrate the internationally recognized disputed Himalayan territory with the rest of the country. 

Trailer of film, 'Article 370'

A poster of 'Article 370', a short film written and directed by Pakistani Ibrahim Baloch and released on August 5, 2020 to mark the one year anniversary of India stripping the autonomy of Jammu and Kashmir. (Photo courtesy: Ibrahim Baloch)

“I started following the situation in Kashmir after India announced its decision and realized that it was primarily debated from a political perspective,” he said on Tuesday. “I was more interested in the human side of the issue. So after doing some research, I came across stories of Kashmiri women in Srinagar who gave birth during the lockdown imposed by the Indian administration.” 

A poster of 'Article 370', a short film written and directed by Pakistani Ibrahim Baloch and released on August 5, 2020 to mark the one year anniversary of India stripping the autonomy of Jammu and Kashmir. (Courtesy: Ibrahim Baloch)

Article 370 of India’s constitution promised special status to Jammu and Kashmir, providing a semblance of autonomy to the region. However, India revoked the provision last year, giving Baloch the idea of working on a story on the only Muslim-majority region under India’s rule. 
Shot in the part of Kashmir administered by Pakistan and called Azad Kashmir, Article 370 focuses on the life of Gul-e-Rana, a married Kashmiri woman. 
Talking to Arab News, Mariyam Nafees, who played the lead role, said that she was deeply inspired by the story. 
“This film depicts the reality and current situation of Jammu and Kashmir,” she said. “The twenty-minute visuals in the movie that show the suffering of a family in the region are full of human emotions. Projects like these are not undertaken too often.” 
“Gul-e-Rana is a pregnant woman who goes through a tough situation while waiting for her husband during the lockdown,” Baloch said. “I am confident that this film will resonate with people across the world since it projects a human story. Our aim was not to take sides but to highlight the plight of the people by telling their tales passionately.”