International Monetary Fund's (IMF's) senior management and the Board of Directors can expedite or delay the processing of a bailout package, well-informed sources told Business Recorder. There are no hard and fast rules as to the processing time, sources further maintained, but if the borrowing country resists agreeing to standard conditionalities without offering alternates acceptable to the Fund then these negotiations can become protracted and delay the processing of the package.
In the case of Pakistan, sources added, given the country's past record of not following through with agreed conditionalities, the IMF may focus on pre-programme conditions. The process of a bailout package involves the staff level team preparing a report highlighting areas of concern backed by technical data provided by Pakistan. The Fund recently concluded Article IV consultations with Pakistan and on 4 October issued a press release that highlighted areas of concern as well as suggestions/recommendations to resolve these concerns.
Former Finance Minister Dr Salman Shah has suggested Pakistan's economic team negotiates and designs the new programme in a way that restores confidence of investors and ensures that the harsh reform measures do not unfold at one go but are implemented in a phased manner.
Shah added that approval of a new bailout package may take 8-10 weeks and added that if Pakistan's requirement is greater than its remaining quota, it can request a special quota.
The IMF mission is scheduled to arrive in Pakistan on November 7 for discussions with country's economic team led by Finance Minister Asad Umar.
Sources in the Finance Ministry concurred that the process of approval of the loan usually takes weeks and is dependent on availability of a Board date. In case of Christmas' and New Year's holidays, the process can be delayed, they added.
Asad Umar, in response to queries about the July statement by US Secretary of State Mike Pompeo that the IMF would not provide funds to pay off Pakistan's Chinese lenders, stated that Pakistan's total debt repayment requirements stood at $9 billion for the current fiscal year with annual Chinese repayments of $300 million for the next three years.
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