WASHINGTON: Finance Minister Asad Umar met the World Bank Group President David R Malpass and senior officials of the International Monetary Fund on Wednesday as part of an effort to seek a three-year bailout package.
The finance minister, who reached Washington on Tuesday, said at a news briefing in Islamabad last week that he hopes to finalise the proposed IMF package during his two-day visit to Washington.
The minister is in the US to attend spring meetings of the World Bank Group, which includes the IMF but has also scheduled a bilateral meeting with US Treasury Secretary Steven Mnuchin on the sidelines. The meeting is pivotal as the US support is crucial for any World Bank or IMF package.
In an annual report released on Tuesday, the IMF warned that Pakistan’s growth rate may remain at 2.5 per cent till 2024 unless Islamabad undertakes much-needed economic reforms. While Pakistan understands the need for reforms, the country has urged the IMF to consider why Islamabad falls short of meeting the conditions set by the donors.
“Perhaps, the conditions are too stringent,” said an official familiar with Pakistan’s approach while urging the IMF to help Islamabad undertake reforms. “Structural reforms will bring long-term benefits and in a way that is also appreciated by the people,” the official said. “No political government can ignore public sentiment.”
The latest IMF projections for Pakistan also highlight a widening gap between the government’s revenues and expenditures and underline the country’s ever-growing debt-burden. Pakistan has a country quota of SDR 2,031 million with the IMF, which is equivalent to about $2,818m.
A special drawing right (SDR) is an IMF unit for a financial transaction, which includes a mixed basket of currencies. An individual country’s SDR quota broadly reflects its relative position in the world economy. Pakistan became an IMF member on July 11, 1950, and has concluded a total of 21 financial arrangements with the fund since then.
In October, Pakistan formally requested the IMF for yet another economic assistance package and backed it up with a series of meetings with senior officials of the fund.
The World Bank on Sunday said that Pakistan’s economic growth rate would decelerate further to 2.7pc — the lowest in South Asia — in the next financial year owing to the tight fiscal and monetary policies.
State Bank of Pakistan Governor Tariq Bajwa, Finance Secretary Younas Dagha, Economic Affairs Division Secretary Noor Ahmed and other senior officials of these institutions are also part of the Pakistani delegation in Washington to attend spring meetings.
Published in Dawn, April 11th, 2019