ISLAMABAD: Snubbing sovereign default possibility, Minister of State for Finance and Revenue Dr Aisha Ghaus Pasha on Thursday said the discussions with China and Saudi Arabia were continuing for inflows of $3 billion each and the government was also in contact with International Monetary Fund (IMF) for a bailout.

Talking to journalists after a meeting of the Senate Standing Committee on Finance and Revenue, Dr Pasha said there was no possibility of Pakistan’s default whatsoever. She said the IMF staff was currently on annual holidays but Finance Minister Ishaq Dar has meetings with the fund authorities during the upcoming donor’s conference scheduled to begin on Jan 9 in Geneva. She said Pakistan would honour all its external payment obligations.

Earlier, the minister while responding to difficulties faced by investors on opening letters of credit for imports told the committee that the restrictions had been in place because of economic challenges but were being gradually eased.

The committee meeting presided over by Senator Saleem Mandviwalla discussed in detail the restrictions of LCs causing delay in the development and opening of Five Star Hotel named “Movenpick Hotel, Islamabad”.

She said that the government had to impose some restrictions due to tremendous economic stress and the import of non-essential and luxury items was restricted in the best interest of the country.

Finance minister to engage IMF in Geneva for bailout

She further added that this was just a temporary restriction and will be relaxed as the economic and currency situation improves. The State Bank of Pakistan’s deputy governor also told the meeting that the central bank and government had prioritised imports of petroleum products and other essential items.

The sponsors of the hotel represented by Yasir Ilyas said the 90pc work imports required for the hotel had been arranged but the project was facing delays for almost a year now because of problems in the opening of LCs for $8-9 million worth of imports.

The committee advised the SBP and the Ministry of Finance that given 90pc work already completed they should consider the specific import requests and work for the mitigation of the problems faced by the businessmen in this regard.

The meeting took up the demand of the businessmen from former Federally Administered Tribal Areas (Fata) for waiver of outstanding dues of the Federal Excise Duty/Sales Tax refunds against the industrial undertakings of erstwhile Fata. Representatives of the Malakand Chamber of Commerce and Industry requested the committee to ask the government to table a bill proposing amendments to the Federal Excise Act 2005 providing a waiver of Federal Excise Duty with retrospective effect to steel and ghee & cooking oil industries located in erstwhile Fata and Pata.

Published in Dawn, December 30th, 2022