IMF stresses MoF oversight on SOEs

The International Monetary Fund’s (IMF) representative in Pakistan on Wednesday said that the reform process to which the government had agreed required the country to keep all state-owned enterprises (SOEs) under the Ministry of Finance (MoF) oversight.

“Following through on the previously agreed 2021 triage reform process, and other governance and private sector reforms, is important to durably attract foreign investment,” the IMF's Esther Perez Ruiz said in a statement to Reuters.

Pakistan has been discussing outsourcing operations of several of its state-owned assets to outside companies. In March, it kicked off outsourcing of operations and land assets at three major airports to be run under a public private partnership, a move to generate foreign exchange reserves for its ailing economy.

The IMF reached a staff-level pact with Pakistan in June on a $3 billion stand-by arrangement (SBA), a decision long awaited by the South Asian nation which had been teetering on the brink of default.

Meanwhile, in a first contact between the caretaker government in Pakistan and the IMF, the latter has sought more details about the interim set-up’s plan to reduce the piling circular debt in the country’s gas sector.

In a virtual meeting, the acting officials informed the Washington-based lender that it was sticking to the previous coalition government’s plan to introduce a dividend scheme in the gas sector to curb the circular debt.

The scheme is expected to reduce the circular debt by more than Rs400 billion to Rs1.2 trillion.

The IMF had given the nod to the scheme earlier this month when the coalition government was still in the driving seat.

In the virtual meeting between the caretaker government and the IMF, the lender has sought further clarification on the plan to reduce the gas sector’s circular debt.

According to sources, caretaker Finance Minister Dr Shamshad Akhtar will also talk to the IMF.

The caretaker cabinet's top job is to lead Pakistan towards economic stabilisation, with the $350 billion economy treading a narrow recovery path after bagging a last minute $3 billion bailout deal from the IMF, averting a sovereign debt default.