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ISLAMABAD/LAHORE: On Saturday, Prime Minister Shehbaz Sharif said the International Monetary Fund (IMF) had no reason to put off approving the staff-level agreement after receiving financial guarantees from allies. However, a Fund official said the lender was looking forward to receiving “necessary financing assurances” as soon as possible to clear the way for the conclusion of the ninth review of the $7 billion program.
IMF Mission Chief to Pakistan Nathan Porter made the announcement a day after Finance Minister Ishaq Dar confirmed $1 billion in bilateral financial help for Pakistan, which is thought to be the final prior action for staff-level agreement with the international lender.
PM Shehbaz remarked, “The IMF had set a condition for us to arrange funds from friendly countries before it signed a staff-level agreement with us,” while speaking at an event in Lahore. We worked hard for one and a half months to achieve the IMF’s final need by first getting a rollover of $2 billion from China and then $3 billion from Saudi Arabia and the UAE.
The premier complimented Bilawal Bhutto-Zardari and Ishaq Dar for their “hard work” in this regard and stated that “the new army chief made efforts to acquire the funds from Saudi Arabia and the UAE.”
Shehbaz acknowledges having no choice but to accept “stringent conditions,” as the lender emphasizes the necessity to “maintain strong policies.”
He expressed the resolve to overcome these obstacles by reaching an agreement with the international lender as quickly as possible, despite the fact that his government “inherited an IMF agreement that was in tatters.” He agreed that there was “no alternative” and that the government had to comply with the strict requirements established by the IMF.
IMF demands more to do
The Fund, however, praised Pakistan’s receipt of bilateral aid but pressed Islamabad for more guarantees to finalize the agreement.
The agreement to retain strong policies and find adequate funding to assist the implementation efforts was reached during meetings between the Pakistani delegation and IMF employees and management, the statement said.
“The IMF is supporting these efforts and looks forward to obtaining the necessary financing assurances as soon as possible to pave the way for the successful completion of the 9th External Fund Facility review,” the statement continued.
In contrast to an earlier government declaration that the pledge of $2 billion from Saudi Arabia and $1 billion from the UAE would address the issue, an official source noted that the Fund is still waiting for assurances from friendly countries. In addition, Mr. Dar said that the State Bank had received the final payment of $300 million from the Industrial and Commercial Bank of China on its $1.3 billion loan.
Kristalina Georgieva, the head of the IMF, had hoped Pakistan would finish its current program.
At a news conference in Washington, she stated, “My hope is that with the goodwill of everyone and with the implementation of what has already been agreed upon by the Pakistani authorities, we can complete our current programme successfully.”
Separately, as part of the IMF/World Bank spring meetings, Mr. Dar held a virtual discussion with Jin Liqu, the president of the Asian Infrastructure and Investment Bank (AIIB), through a video link.
According to a formal statement, Mr. Dar informed the AIIB president of the government’s economic objectives and reforms for sustainable development while also sharing the present economic prognosis.
According to the announcement, the AIIB president praised the bank’s partnership with Pakistan.
