ISLAMABAD, Jan 26: The government conceded on Monday that it had written a letter to the International Monetary Fund (IMF), but maintained that no memorandum highlighting “economic achievements” made under former president Pervez Musharraf’s rule had been attached.

The Leader of the House in the Senate, Mian Raza Rabbani, who had claimed on Friday that the government had not written any letter to the IMF, changed his position by accepting that a letter of intent had been written by Prime Minister’s Adviser on Finance Shaukat Tarin, but said there was no attachment.

Senator Tariq Azim of the Pakistan Muslim League-Q came up with a copy of the letter and a ‘memorandum on economic and financial policies’ allegedly attached with it. Terming the matter serious, he asked the chair to direct the adviser to explain the situation.

He said the second paragraph of the letter seeking a loan of $7.6 billion mentioned that a memorandum on economic and financial policies was attached.

To add to the government’s embarrassment, Senator Nisar A. Memon of the PML-Q told the house that copies of the letter and the attached memorandum had been distributed last month among members of the Senate Standing Committee on Finance.

The memorandum, while describing recent economic developments, reads: “The country’s real GDP increased from $60 billion in 2000-1 to $170 billion in 2007-8, with per capita income rising from under $500 to over $1,000. The volume of international trade increased from about $20 billion to nearly $60 billion. For most of the period, real GDP grew at more than seven per cent a year with relative price stability. The improved macro-economic performance enabled Pakistan to re-enter the international capital markets in the mid-2000s.

“Large capital inflows financed the current account deficit and contributed to an increase in gross official reserves. Buoyant output growth, low inflation and the government’s social policies contributed to a reduction in poverty and an improvement in many social indicators.

“This strong macro-economic performance resulted from the implementation of a series of important structural reforms. In early 2000s, with financial support from international financial institutions, including the IMF, the World Bank and the Asian Development Bank, the government expanded the role of markets in the economy, privatised a number of large state-owned enterprises, established market-based regulatory bodies and took steps to reduce the cost of doing business in Pakistan.”

The macro-economic situation, however, deteriorated significantly in 2007-8 and the first four months of 2008-9, owing to adverse security developments, large exogenous price shocks, global financial turmoil and policy inaction during political transition to the new government, the memorandum added. However, Senator Raza Rabbani blamed the previous government for the present economic mess.

Talking to Dawn, Senator Tariq Azim termed it an attempt to ‘mislead the house’ and vowed to keep raising the issue till the adviser clarified the government’s position.