IMF asks govt to carry out long-delayed structural reforms.

Byline: Khaleeq Kiani

WASHINGTON -- The International Monetary Fund (IMF) has asked Pakistan to address its longstanding issues through structural reforms and strengthening of institutions through legal framework to help economy be competitive.

The government was also advised to strengthen cooperation at the federal and provincial levels for greater fiscal and economic calibration, said IMF's Middle East and Central Asia Region Director Jihad Azour responding to a Dawn question at a news conference.

An important track for the country was 'the structural reforms that will allow Pakistan economy to be more competitive by addressing some of the longstanding issues related to the weaknesses', he said.

Mr Azour did not directly respond to a question on the timing of the bond launch. He was asked if in his view the current zero-interest rate environment in the capital markets provided an opportunity to Pakistan to go for $3 billion to $4bn bonds, both Islamic and Eurobond.

He said Pakistan should 'address some of the legacies of the past like, for example, in the energy sector and also strengthen institutions providing the right legal framework for the Central Bank for the power sector as well as other entities'.

Mr Azour said the reform agenda currently in place in Pakistan, supported by the IMF programme, was the right recipe for the country to improve macroeconomic stability, address some of the imbalances that the country saw in the past few years, allow the economy to be more competitive, and improve its creditworthiness.

Mission to visit Islamabad by month end for first review, says Fund's director

He said an IMF mission would go to Islamabad by the end of the month for the first review. 'So far, the progress that has been achieved goes in the right direction. It's too early to give a full assessment. We need to wait for the mission to go there and do due diligence work on the ground,' he remarked.

'We have now a couple of months - three months almost since the beginning of the programme - it looks like things are moving in the right direction.'

The IMF director said the reform journey under this programme had two important tracks. 'One is Macro-stabilisation for which there are a number of steps taken by the central bank on financial and monetary side and also by finance ministry on the fiscal side. The other and more important is the Structural Reforms to allow economy to be more competitive.'

Mr Azour said this reform agenda was...

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