Key objectives under new programme: To govt’s chagrin, IMF team calls on PTI chairman

ISLAMABAD/ LAHORE: The International Monetary Fund (IMF) has approached major political parties in Pakistan, including Pakistan Tehrik-e-Insaf (PTI), to seek assurances of their support for the key objectives and policies under a new Fund-supported programme ahead of the approaching national elections.

This was confirmed by Esther Perez Ruiz, IMF Resident Representative in Pakistan while responding to a Business Recorder query.

She stated, “IMF staff is in the process of meeting with representatives of the major political parties in Pakistan, including PML-N, PPP, and PTI, to seek assurances of their support for the key objectives and policies under a new IMF-supported program ahead of the approaching national elections.”

IMF’s Executive Board meeting on Pakistan set for July 12

As announced, the new stand-by arrangement (SBA) with Pakistan is expected to be considered by the IMF Executive Board in the coming days, she added.

While giving details of the meeting, PTI Central Punjab General Secretary Hammad Azhar tweeted that a team of the IMF led by its Resident Representative Esther Perez called on PTI Chairman Imran Khan on Friday to discuss the recently announced US $3 billion bailout programme.

IMF Country Chief Nathan Porter joined the meeting through a video link from Washington which was also joined by the PTI’s economic team, including PTI Vice Chairman Shah Mehmood Qureshi, former federal finance minister Shaukat Tarin, Omer Ayub Khan, Hammad Azhar, Dr Sania Nishtar, Shibli Faraz, Taimur Jhagra and Muzammil Aslam.

Azhar said the meeting lasted for more than an hour; discussions took place around the Staff Level Agreement that the IMF has reached with the government of Pakistan for the 9-month US $3 billion Stand-By Arrangement (SBA) and in this context, the PTI supports the overall objectives and key policies.

“We welcome the SBA to preserve macroeconomic stability by anchoring external financing and a sound policy ahead of the national elections due in the fall of this year and until a new government is formed. We wish to stress the importance of programmes to protect the lower-income segments of the population from high inflation,” he added.

According to him, the PTI considers political stability and the rule of law as integral to the economic stability of Pakistan. Following free, fair, and timely elections as per the Constitution, a new government mandated by the people would initiate reforms and engage on a longer-term basis with multilateral institutions to further economic transformation and higher and more inclusive growth.

Later, while addressing his supporters through a video link, PTI Chairman Imran Khan said that his party had agreed to endorse the SBA with the IMF until the elections were held and a new government was formed; when a new government comes into power after the elections, it would hold fresh talks with the IMF based on its strategy. “The decision to support the SBA was taken while keeping in mind the risk of default and hyperinflation that the country was facing,” he added.

He pointed out that when his government sought the support of the coalition parties to pass a law to meet the requirement of the Financial Action Task Force (FATF), they said to give them an NRO (amnesty) otherwise they would not support the government’s legislation. “We did not give them the NRO and they refused to support the legislation. However, we have agreed to support the IMF’s standby agreement in the interest of the country,” he added.

He also disclosed that he took up the matter with the IMF Country Head regarding the political situation in the country. “I told him that without political stability the US $3 billion standby arrangement would not address the economic issues in the country. Only free and fair elections could stabilise Pakistan; a government with a mandate to govern for the next five years would have the will to take tough decisions to fix the economy,” he added.

Khan further said that he also told the IMF that the people of Pakistan were facing severe hardship; thus, while giving a programme to Pakistan, it should protect low-income people against inflation.

Meanwhile, Commerce Ministry stated that in a significant development for Pakistan’s economic landscape, Ester Perez Luismet with the finance team of the Pakistan People’s Party (PPP), including Syed Naveed Qamar, the Federal Minister for Commerce, and Saleem Mandviwala.

The meeting held here in the minister’s enclave, aimed to discuss the possibility of a standby agreement with Pakistan, which would have a profound impact on the nation’s financial stability.

The PPP expressed its willingness to support the IMF programme, citing larger national interests as the driving force behind their decision.

Naveed Qamar, representing the party’s finance team, acknowledged the significance of the standby agreement in addressing Pakistan’s economic concerns.

He reiterated the PPP’s commitment to working in harmony with the IMF to ensure the successful implementation of the programme. The discussion between the IMF representative and the PPP finance team is seen as a positive step towards economic reform and stability in Pakistan.

Former federal minister Hammad Azhar took to Twitter and stated that PTI’s economic team has been approached by the IMF to solicit the party’s support for the $3 billion SBA and its broad objectives. An IMF team will call on Party Chairman at Zaman Park this afternoon. Both PTI’s economic team and the IMF team will join, in person and virtually, to take part in the discussions, he added.

The IMF and Pakistan reached $3 billion nine-month SBA, after the country failed to complete yet another IMF Extended Fund Facility (EFF) programme of 6.5 billion dollars, which ended on June 30, 2023, unsuccessfully.

The new staff-level agreement is subject to approval by the IMF Executive Board, with its consideration expected on 12th July 2023. The Executive Board schedule available on the Fund’s website is not showing Pakistan on its agenda, but officially it has been conveyed that the Board would take Pakistan’s case on July 12, 2023.

Official sources in the Finance Ministry revealed to Business Recorder that there are high chances that the IMF Executive Board would approve the new programme for Pakistan. After the approval of the IMF board, Pakistan will get the installment of $1.1 billion.

Copyright Business Recorder, 2023