Ordinance saved the day for govt in talks with IMF
http://www.thenews.com.pk/top_story_detail.asp?Id=23202
Saturday, July 11, 2009
By Mehtab Haider
ISLAMABAD: The tough negotiations going on between Pakistan and the International Monetary Fund (IMF) forced the government to hurriedly promulgate the PDL Ordinance to save the $7.6 billion loan programme from falling apart.
Pakistan and the IMF are currently holding talks on the budgetary measures for 2009-10. The suspension of carbon surcharge by the Supreme Court (SC) put the economic team, led by Adviser to the Prime Minister on Finance Shaukat Tarin, in a very awkward situation, as they were not in a position to convince the IMF over another revenue shortfall of Rs 122 billion in case the carbon tax was withdrawn.
After holding consultations with the top leadership of the country, economic managers asked the government to promulgate the presidential ordinance to impose the fixed petroleum levy, said the official sources, adding that the move would enable the government to achieve the envisaged fiscal deficit target of 4.9 per cent of the GDP.
When contacted, Secretary Finance Salman Siddiq, who is currently in Istanbul, Turkey, for crucial talks with the IMF, said on Friday that he was in a meeting and could not take any question. He asked this correspondent to call him again after 30 minutes, but did not attend the call when another attempt was made to contact him.
The official sources, however, confirmed that the tough ongoing talks with the IMF forced the government to hurriedly promulgate the ordinance in the wee hours to avoid the collapse of talks with the IMF. They added that it was wrong to call the tax carbon surcharge for collecting money, which was to be used to meet the fiscal deficit target.
The Ministry of Finance higher-ups in their private discussions conceded that no proper consultation was carried out by the government and that some outsiders played an important role in finalising the crucial budgetary proposal. The economic managers knew very well who recommended the imposition of carbon surcharge, which hugely embarrassed the government, said an official.
Technically, it was wrong to impose the carbon surcharge without taking any steps to improve environment, said the official and added that it was on this basis that the apex court struck it down.
Another official, who is part of the economic team in Istanbul, told The News that it was quite a tough process with the IMF after inking the $7.6 billion loan package in November 2008. Pakistan has so far received $4 billion from the IMF and another tranche, worth $840 million, is expected by the end of July, depending on the outcome of the ongoing round of talks.
http://www.thenews.com.pk/top_story_detail.asp?Id=23202
Saturday, July 11, 2009
By Mehtab Haider
ISLAMABAD: The tough negotiations going on between Pakistan and the International Monetary Fund (IMF) forced the government to hurriedly promulgate the PDL Ordinance to save the $7.6 billion loan programme from falling apart.
Pakistan and the IMF are currently holding talks on the budgetary measures for 2009-10. The suspension of carbon surcharge by the Supreme Court (SC) put the economic team, led by Adviser to the Prime Minister on Finance Shaukat Tarin, in a very awkward situation, as they were not in a position to convince the IMF over another revenue shortfall of Rs 122 billion in case the carbon tax was withdrawn.
After holding consultations with the top leadership of the country, economic managers asked the government to promulgate the presidential ordinance to impose the fixed petroleum levy, said the official sources, adding that the move would enable the government to achieve the envisaged fiscal deficit target of 4.9 per cent of the GDP.
When contacted, Secretary Finance Salman Siddiq, who is currently in Istanbul, Turkey, for crucial talks with the IMF, said on Friday that he was in a meeting and could not take any question. He asked this correspondent to call him again after 30 minutes, but did not attend the call when another attempt was made to contact him.
The official sources, however, confirmed that the tough ongoing talks with the IMF forced the government to hurriedly promulgate the ordinance in the wee hours to avoid the collapse of talks with the IMF. They added that it was wrong to call the tax carbon surcharge for collecting money, which was to be used to meet the fiscal deficit target.
The Ministry of Finance higher-ups in their private discussions conceded that no proper consultation was carried out by the government and that some outsiders played an important role in finalising the crucial budgetary proposal. The economic managers knew very well who recommended the imposition of carbon surcharge, which hugely embarrassed the government, said an official.
Technically, it was wrong to impose the carbon surcharge without taking any steps to improve environment, said the official and added that it was on this basis that the apex court struck it down.
Another official, who is part of the economic team in Istanbul, told The News that it was quite a tough process with the IMF after inking the $7.6 billion loan package in November 2008. Pakistan has so far received $4 billion from the IMF and another tranche, worth $840 million, is expected by the end of July, depending on the outcome of the ongoing round of talks.
