IMF does not seem to be ready to show any restraint in its demands and expectations from the current Shehbaz Sharif government…reports Hamza Ameer
The International Monetary Fund (IMF), Pakistan’s only hope for a bailout from its crippling economic conditions and looming threats of a meltdown, does not seem to be ready to show any restraint in its demands and expectations from the current Shehbaz Sharif government, as it snubbed Islamabad’s recent request to show flexibility and go ahead with the signing of the staff-level agreement.
In the most recent development, Pakistan’s Finance Minister Ishaq Dar had a virtual meeting with the IMF’s Director for the Middle East and Central Asia Jihad Azour, where he requested the IMF Director to show flexibility and consideration towards Pakistan and sign the staff-level agreement.
However, Dar’s desire could not be fulfilled as he failed to convince the IMF Director to give him a date of the agreement, despite the existing dangerous and constantly worsening economic crisis in the country.
As per details, the IMF Director re-emphasised the issue of petrol subsidy and possible fiscal shortcomings that may trigger because of the implementation of the subsidy plan.
“The minister (Dar) urged the IMF not to raise the issue of petrol subsidy, and objected to the IMF’s approach of seeking clarification about the schemes announced by Prime Minister Shehbaz Sharif,” a government source said.
“The Finance Minister also requested the IMF to lower the needed foreign loan requirements by another $1 billion to $5 billion after improvement of the current account deficit,” the source added reminding that the IMF has already cut the requirement by $1 billion to $6 billion last month.
Dar highlighted the steps undertaken by the current government to satisfy and implement the pre-conditions of the IMF, insisting that the delay in the approval of the 9th review of the IMF Extended Funding Facility (EFF) programme to Pakistan, other connected funding from global lenders like the World Bank and other multilateral institutions, have also been withheld, causing major damages to the country’s economic condition.
“The minister informed that all prior actions for 9th review under the Extended Fund Facility have already been completed and government of Pakistan is fully committed to fulfill its obligations as agreed with the IMF,” stated a press release of the Finance Ministry.
But to put Dar’s case to rest, the IMF maintained that all the issues remained unsettled until the deal was ratified by its executive board, irrespective of the fact whether a country met the prior actions before the staff-level agreement or after that.
The IMF hoped that the staff-level agreement would be signed soon, highlighting the need for Pakistan to ensure visible progress on the reforms in the various sectors and complete the IMF programme in time.
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