We didn’t ask Pakistan to hike power tariff: IMF

IMF authorities say the introduction of RGST bill marks start of implementation of conditions agreed with the Fund.

ISLAMABAD: The International Monetary Fund (IMF) has said that it has not asked Pakistan to increase electricity tariff as this is something the country has to decide itself. “The IMF has only asked Pakistan to solve the issues related to the energy crisis in consultation with the World Bank and the IMF,” it said.

The IMF authorities have maintained that the introduction of the RGST bill in parliament marks the start of implementation of conditions agreed with the Fund and that they have told the Pakistani officials that the step has strengthened their hand.

They said the IMF review mission will recommend issuing the next tranche to Pakistan in its report. However, presentation of the RGST bill in parliament will not suffice as it will also have to be implemented in order for Islamabad to qualify for the $1.7b loan installment.

A senior IMF official, while talking to Express, rejected the notion that Pakistan was increasing the electricity tariff to fulfill the demands of the Fund. He said the Fund has only asked Islamabad to sit with the two Brettonwood institutions to solve the power sector problems while increase in the electricity tariff was its own issue.

He pointed out that the IMF has no expertise in power sector and whatever is needed to be done is Pakistan’s own decision. He said that IMF only identifies problems in its capacity as a donor.

When approached, finance secretary Salman Siddiqi endorsed the IMF’s standpoint and said that the reformed GST has been presented in parliament and, since under the law a mini bill has to be approved within 14 days, the standing committee of the Senate will present its report in 14 days followed by its expected approval. He said the meeting of the Senate’s standing committee on finance will be held on November 22 and it will review the text of the RGST bill.

Replying to a question he said that if the RGST bill is approved by the parliament before December 5, a staff report can be circulated within the stipulated period of 12 days for the provision of $1.7 b tranche and Pakistan’s case can be presented in the meeting of the executive board of the IMF which is due on December 17.

Published in The Express Tribune, November 15^th, 2010.