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Govt will never agree to IMF terms in contradiction with Pakistan's well-being: Asad Umar

Updated November 08, 2018

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Finance Minister Asad Umar during a meet and greet with PTI supporters. —File photo
Finance Minister Asad Umar during a meet and greet with PTI supporters. —File photo

Finance Minister Asad Umar said on Wednesday that the government will be requesting monetary assistance from the International Monetary Fund (IMF) to the tune of "at least $5 to $6 billion" while also stressing that the government will never agree to terms that are in contradiction with the country's well-being.

The minister made these remarks while speaking to Hamid Mir on his television show 'Capital Talk' on Geo News.

Referring to the IMF as a lender of the last resort, the finance minister said that this will be the 19th time the fund will be approached for a financial bailout and vowed that the government sincerely aims for it to be the last.

He said that in the past instances, governments made it a habit of securing a bailout, letting the financial issues and economic hurdles pile on, and then simply handing them over to the next party that comes to power.

When asked by the host how much money the total package would amount to, Umar responded by saying: "The total figure is not the significant factor here. In the international system, the IMF stamp carries a lot of weight. The other institutions [including] World Bank, Asian Development Bank, Asian Infrastructure Bank, and commercial banks all look to the IMF when a country faces severe financial difficulties. When the approval is given, then they are willing [to lend]."

"In securing assistance from friendly countries, we have reduced the burden an IMF programme would place on us", he said.

When pressed again by the host to provide an approximate figure, the finance minister conceded that the government would be requesting a sum of "at least $5-$6 billion".

Umar was also questioned regarding the meeting with US diplomat Alice Wells which took place a day earlier. The finance minister revealed that the talks were focused mainly on the economy and the IMF. When asked by the host what she (Wells) has to do with the IMF, the finance minister responded: "They are the IMF's biggest shareholders."

He added that it remains to be seen "which conditions they want us to agree to in exchange for the bailout".

Mir then proceeded to ask the finance minister to reveal, in the spirit of the open discussion the two had been having during the show, what condition posed by the IMF the government would never agree to.

"Anything that calls for the compromise of Pakistan's well-being," was Umar's response to which Mir responded by saying: "An immense amount of economic burden placed on its citizens does threaten Pakistan's well being, doesn't it?"

The finance minister said that he does not think such economic restrictions will be placed which will have a huge and overarching effect on the country's well-being. He clarified though that the conditions remain to be seen which is why it was necessary to have secured alternate means of assistance in preparation of such conditions.

Regarding the data breach in "almost all" banks which made waves the past two days, Mir sought to obtain a final word from the finance minister regarding the extent of the hack.

On the one hand, the host said, the State Bank of Pakistan (SBP) had denied that multiple banks had been hit and had provided the name of only one (foreign) bank, while on the other, the Federal Investigation Agency (FIA) director of the cybercrime wing had claimed that "almost all banks" had been affected.

At this, Umar acknowledged the SBP claim and responded by saying that "to his knowledge" it was only one bank, based on the information he has "so far".

He said the government recognises cybercrime as a major problem and to that end, it was decided during the prime minister's visit to China that Beijing would offer its expertise in tackling cybersecurity issues.

"China has made immense progress in tackling cybercrimes and we shall be implementing their excellent cybersecurity systems here in Pakistan," said Umar.

Mir expressed astonishment at the fact that cybersecurity experts from China will help resolve the issue when it was, in fact, Chinese individuals who were caught stealing money by planting skimming devices into ATM machines.

"Those were individuals. The government of China has agreed on the transfer of technology. Though the US remains the leader in cybersecurity, China has moved ahead by leaps and bounds," Umar reiterated.

As the conversation turned to the question of privatising the steel mills and PIA, Umar confirmed that the two entities would not be privatised.

When asked how it is that the government plans to manage their operations without doing so, the finance minister said: "When organisations are put into the privatisation list, their control goes to the privatisation ministry. The ministry's job is to privatise the organisation, not to restore it to an operational state."

He said that 20 years have passed and such firms are neither being privatised nor being made operational. He claimed that no one would agree to pay "even Rs1" in exchange for these firms.

"Our aim is to get these firms up and running, especially the steel mills. I used to promise people and we have taken a decision in a meeting of the Economic Coordination Committee today and fulfilled that promise to steel mills pensioners."

The ECC has approved the release of a sum of Rs1 billion to resolve the issue, he said, adding that Abdul Razzak Dawood, adviser to the prime minister on trade, industry and investment, has been given a period of 45 days to submit a plan on how to rescue the steel mills fom the quagmire it is in currently.

Regarding PIA, he expressed confidence that the airlines will experience a turnaround under the guidance of its new CEO whom the finance minister found very "energetic and enthusiastic" when he met him.

The show host then remarked that another failed responsibility — which was also a constitutional requirement of the last government — also remains to be fulfilled: the National Finance Commission (NFC) award.

The finance minister said that within the first week of being elected to his post, he had written a letter to the four chief ministers to nominate representatives from each of their provinces.

"I have yet to receive a response, with the exception of Mahmood Khan, the Khyber Pakhtunkhwa chief minister."

The finance minister said he told his special assistant today that "whether or not the chief ministers move the matter forward, we would begin work at our end".