Page 13 - CMA Journal (Mar-Apr 2023)

Exclusive Interview
Exclusive Interview

Dr. Hafiz A. Pasha

r
m
Former Federal Minister for Finance and
F
o
Professor Emeritus Beaconhouse
P
National University (BNU) Lahore
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“
The current IMF program is

Stand-by Facility of nine months with

a loan amount of $3 billion. It has

contributed to a significant increase
in foreign exchange reserves and

helped in stabilizing the economy “

ICMA: In your view, what role does the IMF play in ICMA: What are the major challenges facing
shaping economic reforms in Pakistan? Pakistan’s economy, especially concerning the
repayment of loans?
Dr. Hafiz A. Pasha: IMF supports Pakistan in managing a
difficult economic situation in which foreign exchange Dr. Hafiz A. Pasha: Despite the recent increase in the

reserves have fallen to a critically low level. This is foreign exchange reserves, they still remain low at under
achieved through extension of loan under a special $8 billion. This provides import cover for only one and a
facility. Disbursement of this loan is conditional on half months. The ‘safe’ level is three months.
implementing the agreed agenda of reforms and Pakistan’s annual external financing requirement is $18 to
meeting the performance criteria with the objective of $20 billion, net of likely rollovers. There has been no inflow
stabilizing the economy. of funds from private creditors this year, because of the low
credit rating, despite the umbrella of an IMF program.
ICMA: How would you assess the current IMF
program, particularly in terms of the established Achieving the annual external financing requirement is
targets and their attainment? the biggest challenge today.
Dr. Hafiz A. Pasha: The current IMF program is Stand-by ICMA: How do the conditions set by the IMF impact
Facility of nine months with a loan amount of $3 billion. It Pakistan’s economic landscape?
has contributed to a significant increase in foreign
Dr. Hafiz A. Pasha: The actions and reforms agreed to
exchange reserves and helped in stabilizing the with the IMF focus primarily on stabilization of the
economy. The first review was successfully completed economy by reduction especially in the current account
and the second and last review is currently under way. deficit and the budget deficit. This requires more
The IMF may ask for gas and electricity tariff increases intensive use of the policy instruments of exchange rate
and some taxation proposals to ensure that the FBR

depreciation, hike in interest rates and tax rates, and
meets the annual revenue target. expenditure cuts.
ICMA’s Chartered Management Accountant, Mar-Apr 2024 11