ISLAMABAD: State Minister for Finance and Revenue, Aisha Ghaus Pasha, strongly criticized the International Monetary Fund (IMF) on Wednesday, accusing the organization of “intervening” in Pakistan’s internal affairs. Pasha labeled the statement made by IMF Mission Chief for Pakistan, Nathan Porter, regarding the political situation in the country as “extraordinary,” emphasizing that Pakistan’s actions are in accordance with the law.
Concerns Over Delay in Staff-Level Agreement Before Budget Announcement:
While the IMF traditionally refrains from commenting on domestic politics, Porter had expressed hope that Pakistan would find a peaceful way forward in line with the Constitution and the rule of law. Reacting to this, the state minister emphasized that a delay in reaching a staff-level agreement between Pakistan and the IMF, prior to the announcement of the federal budget on June 9, would be detrimental to both parties.
Prime Minister Seeks IMF Assistance to Revive Stalled Facility:
Confirming reports of Prime Minister Shehbaz Sharif’s communication with IMF Managing Director Kristalina Georgieva, Dr. Pasha revealed that the premier had assured the fund’s chief that Pakistan would fulfill all its obligations. On May 27, PM Shehbaz personally reached out to Georgieva, requesting assistance in reviving the stalled $6.5 billion facility. The premier sought her intervention to complete the pending ninth review, which would unlock $1.1 billion in financing for the cash-strapped nation.
Obstacles in Reviving Bailout Program as Expiry Date Approaches:
The coalition government has been engaged in negotiations with the Washington-based lender since November, aiming to revive its bailout program. However, the financing gap remains a significant obstacle, with approximately $2.7 billion yet to be disbursed from the $6.5 billion program set to expire next month.
Contingency Plans and Prioritizing IMF Program Revival :
Addressing concerns about Pakistan’s contingency plan in the event of failing to convince the IMF before the program’s expiry on June 30, the state minister affirmed that the Ministry of Finance is prepared with a backup plan. However, she stressed that their priority is to revive the IMF program.
Focus on Relief Measures in “Election Year Budget” :
In regard to the upcoming budget, Dr. Pasha assured the public that the finance bill would prioritize providing relief to the people, as it is an “election year budget.” Finance Minister Ishaq Dar echoed this sentiment, expressing Pakistan’s willingness to share budget details with the IMF. He expressed his desire for the IMF to clear the ninth review before the budget’s presentation in early June, as all the conditions for that review have already been met.
Emphasis on Separate Reviews for Bailout Program:
Minister Dar highlighted the importance of maintaining separate reviews for the bailout program, stating that combining the ninth and tenth reviews would be unfair to Pakistan. He emphasized that Pakistan would not agree to such a consolidation.
Continued Negotiations and Focus on Financial Stability :
As the negotiations between Pakistan and the IMF continue, the focus remains on reaching a staff-level agreement before the budget announcement to ensure the country’s financial stability and meet the needs of its citizens.