ISLAMABAD: The International Monetary Fund (IMF) has asked Pakistan to seek parliamentary approval on major economic reforms related to the energy, power, tax sectors and on the privatization of state-owned enterprises (SOEs) before starting formal talks for another loan program, a finance ministry official said on Thursday. 

Facing low foreign exchange reserves, currency devaluation and high inflation, Pakistan last month completed a short-term $3 billion IMF program that helped stave off a sovereign default. However, the government of Prime Minister Shehbaz Sharif has stressed the need for a fresh, longer-term program with the global lender. 

An IMF mission reached Islamabad last week to negotiate with Pakistani authorities for a fresh bailout program, holding talks with officials on reforms in key economic sectors. The mission is wrapping up its visit today, Thursday, without reaching any staff-level agreement with Islamabad. 

The government would present the economic reforms demanded by IMF or “prior actions” in parliament in the Finance Bill 2024-25 likely to be presented on June 7, the finance ministry official with knowledge of the negotiations, said on condition of anonymity. 

“The IMF has suggested authorities to get parliamentary approval for the new loan program’s targets and conditions before initiation of the formal talks,” the official told Arab News. 

“In fact, these are the prior actions that Pakistan is required to take care of before reaching a staff-level agreement with the Fund for the new bailout package.”

The international lender has urged Islamabad to overhaul its SOEs and introduce tax, energy and power reforms. Pakistan has had to take painful measures in line with the IMF’s demands since 2022, which included hiking fuel and food prices. 

The finance ministry official said the government intends to introduce key reforms in the energy and power sectors in line with the IMF’s demands, besides broadening the tax base through progressive initiatives. 

“The government will take all parliamentary parties into confidence over the digitalization of the Federal Board of Revenue and the privatization of the SOEs,” he added. 

Sajid Amin, a senior economist and deputy executive director at the Sustainable Development Policy Institute (SDPI), said the government had “no option but to secure the IMF loan program.” He said the IMF’s program was critical in helping Pakistan meet its external financing needs of around $80 billion in the next three years. 

“The IMF wants political ownership of the loan program and that’s why it is pushing the government to get all the targets and conditions approved by the parliament,” Amin told Arab News.

“The biggest challenge for the government is to convince the coalition partners and opposition over its reforms agenda to secure the IMF loan,” he said. 

Amin warned the upcoming IMF program would be the “toughest” one for the government as it would not be easy for it to complete it. 
 

RIYADH: Saudi Arabia maintained the issuance of over 300 industrial licenses in the first quarter of 2024, consistent with the previous year, official data has revealed.

According to a statement released from the Kingdom’s Ministry of Industry and Mineral Resources, as many as 324 industrial permits were issued in the first three months of the year, with 54 approvals issued in March alone. 

The report further showed that the volume of investments in March amounted to SR1.047 billion ($279 million). 

This falls in line with the Saudi Arabia’s ambition to transform mining into a foundational industrial pillar of the country’s economy. 

It also aligns with the ministry’s goal to strengthen the sector as well as contribute to the ongoing developments in accordance with Vision 2030.

Moreover, the report, which was issued by the ministry’s National Industrial and Mining Information Center, disclosed that the permits in March were distributed across several sectors, including the manufacturing of non-metallic mineral and food products and formed metal goods as well as chemicals and paper and its products. 

According to the analysis, the new industrial licenses were distributed among multiple regions, including the Eastern Province, Riyadh and Makkah, as well as Qassim, Jazan, Madinah, Al-Jouf, and Al-Baha. 

The distribution of new permits shows that small enterprises comprised 77.78 percent, with medium-sized companies following at 22.22 percent. 

In terms of the type of investments, national factories accounted for the largest percentage of the total licenses, with 98.15 percent, followed by foreign establishments with 1.85 percent. 

Furthermore, the study also indicated that the number of factories existing and under construction in the Kingdom until the end of the same month reached 11,832 factories, up from 11,757 facilities in February, with an investment volume of SR1.528 trillion.

Meanwhile, 69 factories started production in March, with an investment volume of SR1.339 billion.

The ministry issues its report monthly to establish the sector’s most critical indicators in Saudi Arabia, demonstrating the extent of change and the growth of industrial investments. 

In April, the Kingdom introduced the Mining Exploration Enablement Program, inviting global firms and explorers to participate in the initiative in an attempt to further expand the sector.

According to a statement at the time, Saudi Arabia’s Ministry of Industry and Mineral Resources and the Ministry of Investment extended invitations to international companies in the sector to register for the scheme. 

The statement further added at the time that the program is expected to boost exploration activities, optimize the value extracted from the mining sector, and expand the Kingdom’s survey potential by focusing on uncharted territories.