Imran Khan hints at overture to IMF
May 07 2018 12:23 AM
Imran Khan: represents Pakistan’s best hope for structural reform, according to the Exotix Capital r
Imran Khan: represents Pakistan’s best hope for structural reform, according to the Exotix Capital report, as long as the PTI remains under his leadership.


Pakistan Tehreek-e-Insaf (PTI) chairman Imran Khan has hinted at approaching the International Monetary Fund (IMF) after coming to power, besides establishing constructive ties with the US.
In his last visit to the United Kingdom, Imran Khan had a private meeting with an equity investment company Exotix Capital, which advises the international investors about emerging financial markets and economies around the world.
According to the report, prepared by the Exotix and shared with its clients, Exotix hosted meeting with Khan.
During the meeting, Khan admitted that IMF assistance for economic policies and financial matters might be necessary.
The meeting was not declared to the public and no report was published in the media about the meeting.
Khan also expressed his pragmatic approach for constructive US relations.
Additionally, the PTI chairman also expressed concerns about lack of transparency in China-Pakistan Economic Corridor (CPEC) and other Chinese-led infrastructure projects.
According to the report, the Exotix Capital termed it surprising remarks by Khan.
The report started with “reluctant acceptance that IMF assistance may be necessary, pragmatism on the need for constructive US relations, regret over the lack of transparency of pricing in Chinese-led infrastructure projects: these were Khan’s surprising remarks”.
The Exotix Capital report stated that “His (Imran Khan) comments on the IMF and the US should provide reassurance to investors, particularly foreign ones, who are skittish about the unknowns represented by the PTI”.
Furthermore, “the comments on Chinese projects should be seen, in our view, not as signalling potential contract revisions (in the style of Sri Lanka), but rather as an admission that little can be done about contracts already signed and to contrast the sort of transparency and more open bidding promised for future projects”.
Exotix Capital was less surprised with the PTI chairman’s remarks about coming to power after the next general election.
The report stated: “Less surprising were his remarks conveying optimism on his party’s chances in the upcoming election, an uncompromising conviction in targeting corrupt individuals and institutions, and his goal to widen the tax collection net.”
Interestingly, Exotix Capital in its previous report released to the investors on February 25, 2018 stated: “We judge there is a 50% probability of the most market-friendly outcome – that is another government led by the current ruling party, the PML-N (the Sharif brothers). We see a 35% probability of the most market-negative outcome (although, ironically, the most positive in terms of initiating structural reforms) – a multi-party coalition government led by the PTI (Imran Khan).
“We see a 15% probability for a market-neutral outcome of an extended, depoliticised, interim administration (either as a result of delayed or disputed elections or due to protracted negotiations among the political parties following a hung Parliament).
“We see zero per cent probability of martial law.”
However, after meeting with Imran Khan, new report, which was released to the investors on April 24, 2018, changed the chances of the winning of election in favour of Imran Khan by increasing it to 50% for PTI and reduced the Pakistan Muslim League – Nawaz (PML-N)’s probabilities to 40%.
The Exotix Capital April report stated that “election probability scenarios have shifted in PTI’s favour”.
Furthermore, “independent of any remarks made during the meeting we hosted, in this report we update the probabilities we assign to different election scenarios”.
The report further stated in the long term, “our view remains that the PTI (as long as it remains under the charismatic leadership of Khan) represents Pakistan’s best hope for structural reform, in terms of the following: 1) efficiency improvements in its bureaucracy and state-owned enterprises; 2) a widening of the tax net (as opposed to the hiking of tax rates on the existing narrow base); 3) address of network theft and non- payment in the electricity sector; and 4) re-engagement with the human and financial capital of the 7mn-8mn Pakistan diaspora”.

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