Pakistan says no to IMF assistance

[Naveed Yaseen]

* Govt announces macro-economic stabilisation package
* Oil subsidy abolished, power subsidy to go by July 2009

By Sajid Chaudhry

ISLAMABAD: Finance Minister Naveed Qamar unveiled a policy package on Friday to restore economic stability, ruling out seeking assistance from the International Monetary Fund.

The package includes elimination of subsidies, reduction in development expenditures, financing through non-inflationary instruments and arranging foreign exchange through privatisation of oil, gas and power sector entities.

“The package will bring down the fiscal deficit and current account deficit and protect our reserves,” Naveed Qamar told a news conference.

He said the measures had been decided by the government, and hoped the IMF would endorse them.

Elimination of subsidies: Qamar said elimination of subsidies on fuel and electricity was a key element in the package.

“I can safely announce today ... [that] we have eliminated the entire fuel subsidy and there is no additional subsidy today,” he said.

Qamar said the government would do away with the subsidy on electricity by the end of the 2008/09 (July-June) fiscal year, but the bulk had already been phased out.

State Bank Governor Dr Shamshad Akhtar said the immediate target of the package was to increase foreign exchange reserves to provide an import cover two to three months.

http://www.dailytimes.com.pk/default.asp...2008_pg1_8