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Pakistan FM blames ’geopolitics’ for stalled IMF loan package as economic crisis worsens

16 June 2023 08:55 pm - 6     - {{hitsCtrl.values.hits}}

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Pakistan's Finance Minister Ishaq Dar has blamed geopolitics for a stalled IMF loan package and said that global institutions wanted the cash-strapped country to default like Sri Lanka and then take part in the negotiations.

He said no reason had been given by the IMF for the unnecessary delay behind the ninth review, which has been pending since November.

Dar also reiterated that the country would meet its obligations with or without the IMF bailout package. "IMF or no IMF, Pakistan will not default," he was quoted as saying by the Dawn newspaper.

He alleged that geopolitics was behind the stalled loan programme as global institutions wanted Pakistan to default like Sri Lanka and then enter negotiations, it said.

Dar, however, said the negotiations with the Washington-based global lender were ongoing and the ninth review would be complete this month.

The International Monetary Fund (IMF) signed a deal in 2019 to provide USD 6 billion to Pakistan on fulfilment of certain conditions.

The plan was derailed several times and the full reimbursement is still pending due to insistence by the donor that Pakistan should complete all formalities.

Dar said on Thursday that although demands for arranging guarantees for USD 3 billion from friendly bilateral partners had been met as committed earlier, the remaining USD 3 billion have been assured by the World Bank and the Asian Development Bank.

The minister said China realised the politics behind the unnecessary delay and its commercial banks agreed to roll over loans to Pakistan.

He said the assurance of USD 3 billion was given by Saudi Arabia and the UAE to the IMF, besides USD 400 million from the World Bank RISE project and USD 250 million from the Asian Infrastructure Investment Bank.
His remarks came after the IMF raised several issues in Pakistan's budget for the fiscal year 2023-24, calling it a "missed opportunity".

The government unveiled a Rs 14.4 trillion budget for 2023-24 in the National Assembly last week as it battled to fend off a looming default due to shrinking foreign reserves.

Dar said IMF's reservations on the current budget might be valid, but the IT, agriculture and Small and Medium Enterprise (SME) sectors were the drivers of growth and exemptions given to these sectors were inevitable to ensure the country's economic growth, which currently stands at 0.29 per cent.

How can we achieve growth without facilitating certain areas of the economy? he asked. Dar said a return of USD 2.5 billion was expected from the IT industry this year, which would increase to USD 4.5bn next year.

He said exemptions have been given by keeping in view the potential growth of the IT industry.

Pakistan's economy has been in a free fall mode for the last many years, bringing unbridled pressure on the poor masses in the form of unchecked inflation and making it almost impossible for a vast number of people to make ends meet. 


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  Comments - 6

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  • Punchi Saturday, 17 June 2023 02:53 AM

    Although we didn’t fully satisfy pre requisites we had India whose Finance minister attended IMF meetings pushing for a loan to be give to us. Islamic Pakistan that exports terrorists to neighbouring countries and Europe and North America is sadly friendless and its only friends China is not helping possibly to bring Pakistan more into its orbit and ourselves with our bankruptcy can’t help

    India only wanted IMF loan for us, so their credit line could be paid off from it Sunday, 18 June 2023 08:12 PM

    India support us so once IMF loan comes through their credit line will be paid out from it. India and Pakistan are always in some conflict. India would advantage itself to speak against IMF loan for Pakistan.

    Gamini Saturday, 17 June 2023 08:49 AM

    Typical Asian politics-blame it on everyone else, other than yourself

    Tissa Fernando Saturday, 17 June 2023 05:18 PM

    This is another country with majority corrupt people. If people are honest they will vote for honest leaders. Since the majority is corrupt , they appoint corrupt leaders. So they are having economic hardships.

    Rohitha jayasinghe Sunday, 18 June 2023 09:03 AM

    Do not forget the IMF and even Harsha warned SL many months ago about the impending collapse but the politicians and bureaucrats swept all warnings under the carpet. If they acted genuinely at that time, we would not have to declare as bankrupt. No point in blaming the politics but blame Jayasundera, Cabraal and Attygalle for devastating our economy. How could they finish USD B 6.0 within 2 years? Good subject for a scholar to earn a doctorate.

    Kirige Bandupala Monday, 19 June 2023 08:36 AM

    Perfectly TRUE!! They (IMF) are destroying the whole world!!


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