ISLAMABAD: The government has asked its economic team to step up efforts to manage economy in next three months for retaining the International Monetary Fund programme as the IMF board has scheduled its meeting in September.

The board meeting will take place weeks before the expiry of the constitutional tenure of Shaukat Tarin as federal finance minister as he had been given the portfolio on April 16 this year under Article 91(9) of the Constitution, which empowers the prime minister to appoint a non-elected person as a federal minister for six months.

A source in the finance ministry told Dawn that the next three months were very crucial for deciding the future course and direction of the economy ahead of next general election.

The government has assured Mr Tarin to get him elected as senator before October 17, which will be the last date of his tenure as federal minister, the source said.

Tarin’s tenure as minister set to end in October

Mr Tarin has categorically conveyed his inability to work as adviser, the source added.

It was also likely that the government may vacate one seat of the National Assembly so that Mr Tarin could contest on it. “Nothing has been finalised so far in this regard,” the source said.

Article 91(9) reads: “A minister who for any period of six consecutive months is not a member of the National Assembly shall, at the expiration of that period, cease to be a Minister and shall not before the dissolution of that Assembly be again appointed a Minister unless he is elected a member of that Assembly: Provided that nothing in this clause shall apply to a Minister who is a member of the Senate.”

When contacted, Finance Minister Shaukat Tarin refused to comment on his status as minister. “I have been appointed by Prime Minister Imran Khan to lead his economic team,” he said, adding a future decision will also be taken by him.

The only area where the minister was willing to comment was the implementation of Kamyab Pakistan programme and indigenous policies adopted in the budget to meet the IMF targets. “We have paused the IMF programme for three months and will show our revenue results,” he said.

Mr Tarin said he was optimistic about good revenue results in July and August and then talk to the IMF over its programme. “We will prove that our strategy of revenue generation is better than the one prescribed by the Fund,” the minister said, adding it would be even better than last year.

He said negotiations were still under way. “We are sticking to what we think is right and they are sticking to what they are saying is right,” the minister remarked. The only agreement with the IMF that the desired results will be achieved through our policies.

Mr Tarin said he had assured the IMF that Pakistan would remain in its programme. He said the IMF had shown willingness to be “flexible in their demands” from Islamabad.

The change of policy from contraction to growth in the budget for 2021-22 was interpreted by many economists that Pakistan could get out of the IMF programme after improvements on the external side. However, Mr Tarin wants to continue with the programme “with some flexibilities”.

He said the IMF would conduct its sixth and seventh review of the programme simultaneously in September. “Now Pakistan’s case will be approved in the board’s meeting in September,” Mr Tarin said.

Regarding inflation, the minister said that international pressure on prices was still very high. “We are expecting that international prices of essential items will come down gradually,” he said, adding that the price of oil in international market fell by $10 per barrel.

He said Opec was producing less oil but now it will have to increase its output. “We are expecting further drop in oil prices.”

In reply to a question, the minister agreed that there was a risk with high oil prices. He said the government had projected Rs600bn as petroleum development levy in the last budget. He said in case of higher prices and lesser collection of petroleum development levy the government would opt for other revenues to bridge the shortfalls.

Published in Dawn, July 25th, 2021