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IMF agreement ‘hinges’ on completion of commitments from friendly countries

Industrial and Commercial Bank of China’s approves rollover facility of $1.3 billion
Finance Minister Ishaq Dar addresses an event in Islamabad on March 16, 2023. Screengrab via YouTube/PTV News
Finance Minister Ishaq Dar addresses an event in Islamabad on March 16, 2023. Screengrab via YouTube/PTV News

The materialization of the commitment by certain friendly countries to bilaterally support Pakistan – a demand made by the International Monetary Fund – was causing a delay in the deal with the lender, Finance Minister Ishaq Dar said on Thursday.

“At the time of previous reviews, certain friendly countries have made commitments to bilaterally support Pakistan. What IMF is now asking is that they should actually complete and materialise those commitments. That is the only delay,” he said at the special session. “And I can assure you that the moment it is done and the staff-level agreement is signed I will make sure that this prorgamme of MEFP is put on the website of Pakistan.”

The finance czar before speaking about the reason described the ninth review as “extensive engagement, unusual too lengthy, too long, and too demanding”.

He was addressing lawmakers from different countries during the special commemorative session held to celebrate Senate Golden Jubilee in Islamabad. Senate Chairman Sadiq Sanjrani presided over the session.

Pakistan desperately needs more than $1 billion to shore up its tottering economy. The Dar-led finance ministry has taken several measures to win the loan from the stalled prorgamme. But, the country still awaits the funds to welcome inflows from friendly countries and other international donors.

“My opinion is my opinion. This review actually, looks like that each time the review is a new programme which is very uncustomary with the IMF. So, the delay is not on the part of the Government of Pakistan,” the finance minister said.

Dar, who claims that he is the only finance minister to complete an IMF programme, said that the country has completed “everything”.

Ensuring a market-based exchange rate, increase in electricity and gas rates, and additional taxes to make up for the revenue slippages were the four major demands set by the international lender for Pakistan.

The Shehbaz Sharif-led administration has meanwhile termed them as “tough” and “difficult”. The lender has exhorted the country to tax the rich and provide subsidies to the poor.

“It shouldn’t be that the wealthy benefit from subsidies. It should be the poor [who] benefit from them. And there the Fund is very clear. We want the poor people of Pakistan to be protected,” Managing Director Kristalina Georgieva told Deutsche Welle Asia on the sidelines of the Munich Security Conference on February 18.

So far, China has come up with financial support for Pakistan. The State Bank of Pakistan’s (SBP) foreign exchange reserves, which dwindled to $3 billion last month, increased after the Board of China Development Bank (CDB) on Wednesday approved a $700 million credit facility for Pakistan in February.

“The reason is nobody is there to compromise anything on the nuclear or the missile programme of Pakistan,” Dar said.

China approves $1.3b rollover

The Industrial and Commercial Bank of China has approved the rollover facility of $1.3 billion, which was earlier repaid by Pakistan to ICBC in recent months, Finance Minister Dar said in a tweet.

“Documentation for second disbursement of US$500 million has been completed by Finance Ministry for release of funds to the State Bank of Pakistan!” it said.

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Ishaq Dar