Finance minister appointment not to affect IMF aid

Karachi:  A delay in appointing a new Pakistani finance minister should not disrupt the delivery of assistance from the International Monetary Fund (IMF), former finance ministry chiefs said yesterday.

Former finance minister Shaukat Tarin announced on February 23 he was resigning to focus on his private business interests.

No replacement has been announced amid media reports that President Asif Ali Zardari and Prime Minister Yousuf Raza Gilani disagreed on who should be in charge of the portfolio.

While Pakistani stock market investors have not been unduly disturbed by the delay in appointing a new minister, they could begin to worry if it went on for much longer, analysts said.

A Pakistani business newspaper reported this week that the failure to appoint a new minister could result in the delay of a fifth tranche of an IMF loan.

Pakistan turned to the IMF for an emergency loan package of $7.6 billion (Dh27.9 billion) in November 2008 to help avert a balance of payments crisis and shore up reserves.

The IMF increased the loan to $11.3 billion (Dh41.49 billion) in July and the central bank received the fourth trance on December 28. The IMF is due to meet on March 24 to approve the fifth tranche.

But Tarin, who oversaw negotiations with the IMF, and another former ministry chief dismissed concern that the failure to appoint a new minister could delay the aid.

"All the technical discussions were completed in February and the proposal had to be circulated for the IMF board meeting," Tarin said.

"I am not privy to any discussions [since stepping down] but there should not be a worry about a delay," he said.

Tarin said the release of the next tranche was just a matter of "circulation of the papers".

Salman Shah, an adviser to the prime minister on finance under former President Pervez Musharraf, also said the delay in naming a new minister should not create difficulties.

"I think if they [the IMF] can be assured that there will not be any sudden changes in policy, then I don't think there should be a big problem," Shah said, adding that if a signature was needed on documents, then the prime minister could sign.

Choice

Government spokesmen have dismissed talk of a disagreement between the president and prime minister on a new minister, saying different candidates were being considered and an announcement would be made when a decision had been made.

Officials said last month four candidates were being considered including Hafiz Pasha, an economist and Nasim Beg, CEO of an asset company, Ishrat Hussain, a ex-central bank governor, and Makhdoom Shahabuddin, minister of health.