— Asad Umar to hold meetings with IMF, discuss external financing needs
— Since 1998, 11 out of 12 IMF programmes have been scrapped because Pakistan failed to institute reforms
LAHORE: A delegation from the International Monetary Fund (IMF) is set to arrive in Islamabad on Thursday, September 27 where it is expected to hold crucial meetings with the Finance Minister Asad Umar, and Minister for Planning Development and Reform, Khusro Bakhtiar.
Pakistan currently faces a myriad of economic problems such as dwindling foreign reserves, a balance of payments crisis, massive financial losses from public sector enterprises such as the Pakistan International Airlines (PIA) and Pakistan Steel Mills (PSM), and extremely low levels of revenue generation from the country’s tax authority.
According to reports shared earlier, the expected team is coming with a complete program of extended funds to Pakistan which would comprise the second part of the Extended Fund Facility (EFF) arrangement. Although Pakistan wanted to have a double-digit program, the IMF has agreed to extend only $7.5 billion out of a quota of around $13 billion for Pakistan. The Fund had already contracted a $6.4 billion bailout program in 2013 which completed in 2016.
Since 1998, the IMF has provided 12 bailout programmes to Pakistan, with only one to have been completed and the rest, abandoned because governments have not been able to institute required financial reforms in the country. Pakistan had declined the last two tranches of another program under the Musharraf-Shaukat Aziz tenure while the rest of the nine programs ended in failures.
Earlier, in an interview with Arab News, Asad Umar negated the narrative of Pakistan desperate for an IMF bailout programme and said, “Pakistan is not in an emergency situation that requires it to rush to the IMF to seek a bailout”.
“We are in discussion with them, but this is not to negotiate for a loan. Our purpose is to do our homework, in case we want to approach them at some stage,” he added, when asked about the purpose of his scheduled meeting with the IMF on September 27.
He further said that during his visit to Saudi Arabia and the United Arab Emirates (UAE), Prime Minister Imran Khan discussed measures for trade enhancement and investment to help ‘fill the external financing gap’, further adding that Pakistan was constantly in touch with international commercial markets and banks for financing.
After the Pakistan Tehreek-e-Insaf (PTI) government took over late in July, talks of Pakistan knocking on the IMF’s door started to surface. US Secretary of State Mike Pompeo then said that it will not support Pakistan’s IMF bailout programme since the funds might be used to repay Chinese loans. Later on, in talks with the foreign ministry of Pakistan when Pompeo visited Islamabad earlier in September, it was revealed that the US will not interfere in Pakistan going to the IMF.