January 29, 2002	Tuesday	Ziqa’ad 14, 1422

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ISLAMABAD, Jan 28: A four-member IMF review mission is arriving here on Jan 31 for two weeks’ visit to discuss the performance of the Pakistan economy during the first six months of 2001-2002 and recommend the disbursement of the 109-million-dollar second tranche out of 1.3 billion dollars Poverty Reduction and Growth Facility(PRGF).

Sources in the multilateral agencies said here on Monday that the mission to be headed by IMF Senior Director Klaus Enders would stay in Pakistan till Feb 15 during which it would hold talks with senior officials of the ministries of finance, commerce, privatization and the Central Broad of Revenue.

The mission would also visit Karachi to meet senior officials of the State Bank of Pakistan and discuss with them matters pertaining to further improving foreign exchange reserves. Quarterly statements on budgetary capital receipts and disbursements, including repayments of bonds, recovery of loans from provinces will also come up for discussion.

The sources said that meeting revenue shortfalls, restructuring CBR, increasing exports, restructuring the banking sector and removing all remaining subsidies and concessions would be discussed between the review mission and the senior officials of the ministry of finance and the CBR.

The government had allowed the CBR to have its revenue collection target revised downward from original Rs457.7 billion to Rs430 billion for the current financial year. And there were reports that the CBR was further seeking reduction in targets due to serious effects of the Sept 11 events.

The issue, the sources said, would be discussed between the members of the mission and Secretary-General of Ministry of Finance Moeen Afzal, Finance Secretary Younus Khan and the Economic Adviser of the Ministry Dr Ashfaque Hasan Khan. The IMF had earlier made it clear that it would not allow downward revision in revenue targets due to various slippages and inefficiency on the part of the officials of the CBR. “But we do not see that the Rs430 billion target could be met. Therefore it will be discussed with the IMF mission,” conceded an official concerned.

The sources said that the delay in civil service reform and devolution of powers at grassroots level would also be discussed with a view to ensuring transparent functioning of all the line departments specially for eradicating poverty for which international donors were forthcoming to offer all necessary funding.

The issue of budget deficit will also be a subject of active discussion. According to IMF, the budget deficit for first two quarters of the current financial year was slightly higher than programmed, reflecting mainly shortfalls in non-tax revenue, and even though overall expenditure was on track.

The sources said that the IMF was concerned that privatization programme could not take off. It believed that one of the factors that delayed the process was Sept 11 events. “But now a rapid privatization is required,” a source said.