Saudi Arabia’s SDR quota: Pakistan to get another $2.8bn from IMF

ISLAMABAD: After Saudi Arabia’s decision to renew $3bn deposit at the State Bank of Pakistan, the IMF and Saudi Arabia have also discussed the possibility of Islamabad being able to borrow up to $2.8bn against Riyadh’s quota of Special Drawing Rights (SDRs) at the Fund, Financial Times reported on Sunday.

“Once finalised, Pakistan’s extent of borrowing from the IMF during the present financial year (July to June) will increase by $2.8bn. This will be a very important gesture,” a senior Pakistani official said.

The assistance would help Pakistan secure a $1.2bn payment from the IMF, whose board is set to meet this month to approve the disbursement. The IMF agreed last month to increase its loan package by $1bn to $7bn, but has conditioned the disbursement on assurances that Pakistan receives additional financial support from elsewhere.

Meanwhile, Finance Minister Miftah Ismail said the government cannot afford to provide subsidy on petroleum products, adding that they had made arrangements to get $4 billion from friendly countries as desired by the IMF.

When asked by the host of Geo News programme “Naya Pakistan”, Shahzad Iqbal, whether the prices of petroleum products would decrease tomorrow as their rates in the global market had reduced and the rupee appreciated, Miftah said no additional tax would be imposed on the products and there would be no increase in the prices by the Finance Ministry. “We cannot afford to provide subsidy on petroleum products and bear any loss,” he added.

The minister said the IMF, for releasing loan, had asked Pakistan to make arrangements for $4 billion from some other sources, claiming they had made arrangements to get the amount from friendly countries. He said after signing the letter of intent, they would send it to the IMF by tomorrow, adding: “We all will have to sit together for the ‘charter of economy’.”

Talking about the imposition of fixed tax on traders, he said he had made a mistake by imposing Rs3,000 tax on small traders and the FBR, instead of Rs3,000, imposed Rs6,000. He said after taxing electricity, revenue collection had been reduced, adding that if the fixed tax on traders was withdrawn completely, there would be a reduction of Rs15 billion in the revenue collection.

Taking a dig at the PTI, Miftah said the party, which was raising the slogan of ‘Haqeeqi Azadi’, had left behind a deficit of $48 billion. He said PMLN supremo Nawaz Sharif had increased the production of electricity, asking: “Did we increase our industrial base?” A department was established to check corruption but it incarcerated innocent people, he added.

He said we should ask ourselves why we have lagged behind many countries of the world. “We are a narrow-minded and emotional nation. We do not give much priority to education. We find faults if Dr Abdus Salam wins the Noble Prize because he was a Qadiyani. We do not like if Malala Yousafzai receives the Noble Prize. However, Pakistanis are an immensely talented people. There is a lack of tolerance in the country. Our religious leaders are also to blame for it. Recently, a Christian was burnt alive and how many people raised their voice against it? People are afraid of religious leaders.”

He said successive governments had failed to check the rapidly growing population. “If you start working to control the population growth, Islam is endangered. The police, army and our teachers are martyred in anti-polio campaigns,” he added.

To a question that according to Bloomberg, Saudi Arabia will not take back $3b given to Pakistan, he said it was right. “A few days ago, the Saudi finance minister had said in Switzerland that they would re-roll it. However, I will let the Saudis confirm it and I would not deny or confirm it. It is also up to the Saudi finance minister to confirm the $1b oil facility to Pakistan,” he added.