IMF team apprised of Pakistan's 'wealth fund' plan
ISLAMABAD: The Pakistan government aims to come up with a 'wealth fund' to turn loss-making public sector enterprises into profit-making entities before their sell-off.
This was divulged by the officials of the finance ministry, State Bank and Federal Board of Revenue to an International Monetary Fund (IMF) delegation which is currently on a visit here, Dawn reported.
The IMF team is on a visit to the nation in connection with the government's privatisation programme for which it trying for a $12 billion loan from the international lender.
The technical discussions, which are likely to focus on taxation regime and revenue generations on Saturday, will continue up to the middle of next week while policy level talks will be held in the last days of the week to ascertain Pakistan's requirement for bridging a funding gap and averting a balance of payments crisis, the daily said.
The visiting team was informed that the government had decided not to offer Pakistan Steel Mills, Pakistan International Airlines (PIA), Pakistan Railways, Utility Stores Corporation, National Highway Authority and the Civil Aviation Authority (CAA) for sell-off.
The government officials observed that all other entities were commercial units except for the CAA which was also a regulatory body in the aviation sector.
The policy statement of federal Finance Minister Asad Umar which focuses on turning the loss-making public sector enterprises into "financially healthy before their privatisation, was also shared with the team.
However, the officials were asked about the source of financing in the said 'wealth fund'.
The IMF delegation were informed that government plans to invest in each entity in phases, and the loss-making public sector entities would be selected based on certain merits step by step.
Officials said the Cabinet Committee on Privatisation had directed the industries ministry to bring up a viable action plan by the middle of December for Steel Mills turnaround.
The IMF team was informed that similar plans were being prepared by relevant ministries for other entities under consideration for privatisation.
The government had already held technical talks with the IMF on the power sector of Pakistan while further round of discussion would focus on monetary policy, and total requirements of the country during the three-year financial gap arrangement.
On Pakistan's request for around $12 billion to bridge the financing gap during the current fiscal year, a senior official of the ministry said that actual details would be clear only after a complete review.
"There are other benefits of entering the IMF programmes as it will enhance the financial standing of the country at international level and the credit rating will also improve,'' the official, however, added.