New Delhi: Pakistan has sought assistance from the US to revive the International Monetary Fund deal that involves the debt-stricken country receiving the remaining half of the $6 billion bailout package. But Pakistanis are not pleased. The Express Tribune calls for “quick planning of economic relief packages that do not fall foul of the IMF.”
It was reported Friday that Finance Minister Miftah Ismail and Minister of State for Finance Dr Aisha Pasha met with US Ambassador Donald Blome and asked for Washington’s support to revive the IMF’s Extended Fund Facility (EFF) programme and bring stability in Pakistan’s economy.
The US, which is the largest shareholder in the IMF, has helped Pakistan in the past in seeking recourse to the fund’s programme reviews.
The team further informed the US Ambassador about their $47 billion budget for 2022-23, which includes several fiscal consolidation equal to 2.2% of GDP despite challenging times. The document was also being reviewed by the IMF so that it could resume talks on the deal.
According to a Dawn report, diplomatic sources in Washington said that in the staff-level talks held in Doha last month, an understanding was reached between the IMF and Pakistan on issues like withdrawing subsidies and increasing tax collection.
Contrary to speculations that the IMF would not want to negotiate with an interim government, the IMF seemed to have no issues in dealing with the US if the steps in the negotiations could be implemented within the government’s tenure, the report had also said.
The Pakistan-IMF deal remains derailed since March after the PTI government led by Imran Khan fell short on its commitments.
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Reactions from media
An editorial in The News International talked about how the government was playing a “cat and mouse” game with the IMF as it wasn’t doing what was needed from them — a decisive action, “which should have been reflected in the budgetary measures.”
“IMF is not talking about the tweaks (in the budget). It has expressed concerns about the budget numbers, including fuel subsidies, a widening current account deficit, and the need to raise more direct taxes. Miftah Ismail is still confident of a successful review and a staff-level agreement with the IMF. The finance minister is either too naive or he knows too much,” it stated.
Another editorial, in The Express Tribune, also talks about how “IMF loan conditions continue to take their toll on Pakistan” as it was believed income tax rates and energy prices were expected to rise.
Economist Wani had called the situation “a tragedy of our own making.” He wrote that Pakistan has been saved because the IMF and a range of “friendly countries” kept supporting through loans but now even the “friendliest of countries” were showing reluctance to bail Pakistan out because they might just be tired of being repeatedly asked for credit.
“This needs to change not just because foreign taps are drying up, but also because this system hasn’t delivered prosperity for most people. A quarter of Pakistanis live below the national poverty line,” Wani wrote.
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PTI slams government
Former human rights minister and PTI leader Shireen Mazari suggested a connection between the finance minister’s meeting with Donald Blome and the regime change. PTI spokesperson Muzzammil Aslam accused Miftah Ismail of damaging Pakistan’s macroeconomy.
“IMFtah met US ambassador after failed to get staff level agreement. He may travel to meet US treasury people to get help. Question- if you can’t manage why you wasted 10 weeks and damaged macroeconomy of Pakistan?” he wrote on Twitter.
This is what US wanted from regime change – kowtowing! Btw Blome hasnt presented credentials yet but subservience in action! Earlier, Imported FM stated he wanted to open trade with fascist Modi regime which has unleashed terror against Kashmiris in IIOJK & ag Muslims in India. pic.twitter.com/voJncy1DVq
— Shireen Mazari (@ShireenMazari1) June 17, 2022
IMFtah met US ambassador after failed to get staff level agreement. He may travel to meet US treasury people to get help. Question- if you can’t manage why you wasted 10 weeks and damaged macroeconomy of Pakistan?
— Muzzammil Aslam (@MuzzammilAslam3) June 17, 2022
Meanwhile, Prime Minister Shehbaz Sharif Thursday criticised the previous PTI government’s handling of negotiations with the global financial institution. “Acutely aware of the impact that a fuel price hike causes. The Government is left with no choice but to raise the prices due to IMF deal that PTI govt signed. Will take the nation into confidence on the specifics of the IMF-PTI deal soon,” he was quoted as saying.
(Edited by Prashant)