IMF ‘seeks assurances’ from Pakistan’s political parties on commitment to new SBA

The International Monetary Fund (IMF) is looking to take on board Pakistan’s major political parties, including the ruling coalition and opposition, as it seeks assurances that objectives and agenda under the new Stand-By Arrangement (SBA) will be implemented ahead of the country’s national elections.

“The IMF staff are 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,” said Esther Perez Ruiz in a statement to Business Recorder on Friday.

The IMF Executive Board is set to take up Pakistan’s SBA – announced after a staff-level agreement last week – in its meeting on July 12.

The ruling coalition and the opposition are currently at loggerheads over key issues, and have been blaming each other for Pakistan’s unsuccessful IMF programme that expired on June 30 at the level of the ninth review.

A new arrangement, which extends Pakistan’s commitment well into the second half of the fiscal year, was reached before the expiry of the Extended Fund Facility (EFF), but many saw it as a last-gasp deal that would require extensive economic measures and reforms to keep the new nine-month programme going.

With general elections expected in the coming months, experts say the IMF would want whomever comes to power remain committed to its new SBA.

The programme is also seen as crucial since Pakistan has faced a barrage of woes in recent months with a perceived default risk and downgrade by international ratings agencies reflecting the state of the economy that has suffered from major political turmoil and frequent change in key leadership as well.