Pak to lose international funding if power sector not reformed, warns IMF

November 3rd, 2010 - 4:26 pm ICT by ANI  

Islamabad, Nov 3(ANI): The International Monetary Fund (IMF) has warned Pakistan of an aid cut-off if the country fails to come up with a credible and irreversible plan to implement power sector reforms.

According to the News, Adnan Mazarie, Assistant Director of IMF’s Middle East and Central Asia Department, has asked the government to introduce the required power sector reforms.

“The Fund has also warned that all IFIs including WB, ADB and even USAID will cease their credit lines and resultantly Pakistan will go into default,” the newspaper quoted a source, as saying.

The warning comes after it was reported that friendly countries and international financial institutions would discontinue their support if the Pakistan government fails to initiate a credible future action plan during the Pakistan Development Forum.

The Pakistan Development Forum is scheduled to be held in Islamabad on November 14-15 to improve the macroeconomic indicators.

Sources had said that there was a strong feeling in the member countries of Friends of Democratic Pakistan (FODP) and International financial institutions (IFIs) that no one in the government was serious about working to improve the economy.

“Friends of Democratic Pakistan, including the US, and international financial institutions mainly IMF, WB and ADB are quite upset as to why the top leadership of the country and the government functionaries of the economic ministries are not serious to increase resources, mobilisation through implementation of tax reforms and plugging the massive bleeding of Rs 226 billion in power sector annually and Rs 250-300 billion in loss making seven to eight public sector entities,” the source had said.

“We want a clear cut, unambiguous and practical plan of action to achieve the budget deficit of 4.7 percent by cutting the expenditure and increasing the revenue,” a diplomat from an FoDP member country added.

According to a report, the foreign direct investment (FDI) in Pakistan has already tumbled by 50 percent and economic activities have slowed down massively in the wake of non-provision of power and gas. (ANI)

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