WASHINGTON: In view of the country’s uncertain economic situation, some in the Pakistan Democratic Movement coalition had suggested that Imran Khan be allowed to remain in power to face the consequences of the economic crisis, Finance Minister Ishaq Dar revealed on Friday.

Late in his term, the former PM had slashed petrol prices, defying his own government’s package with the International Monetary Fund (IMF), which says that subsidies should only benefit the neediest as Pakistan struggles to put its finances in order.

Speaking to international news agencies during his visit to Washington, the minister said that some of his political allies had advocated letting Mr Khan stay on longer to face the music.

“It would have been selfish to have a political approach,” Dar said, justifying the need for the former PM’s removal.

Finance minister seeks rescheduling of repayments, won’t ask for reduction of principal debt

He also maintained that while the country would seek restructuring on equal terms for all bilateral creditors, when asked about possible plans seek a reduction of debt principal, he said that was not part of his agenda.

In an interview with Reuters, Mr Dar also ruled out the possibility of a default on Pakistan’s debt, an extension of the maturity date on bonds due in December or a renegotiation of Pakistan’s current International Monetary Fund (IMF) programme, but would ask for the rescheduling of some $27 billion worth of non-Paris Club debt, most of which is owed to China.

“It will be our endeavor, even at the cost of extra effort, that we should complete the [IMF] programme successfully,” Dar told AFP in a separate interview.

Doing so “sends a positive signal to the international community and the markets,” he said, voicing appreciation to the “very responsive” promises of other nations for Pakistan.

He said that minor adjustments may be needed but “everything is in order” for the next review of the IMF which could release further funding.

The veteran finance minister said multilateral development banks and international donors had been “quite flexible” with ways to meet Pakistan’s external financing needs – estimated at about $32 billion after devastating floods. Some of this may come from reallocating funds from previously approved, slower-disbursing development loans, he added.

Dar, who is participating in the IMF and World Bank annual meetings just over two weeks after taking office, declined to comment when asked whether he thought it would be difficult to persuade China, creditor for about $23 billion of the debt, to participate.

While the minister is known as a staunch defender of the rupee, he said Pakistan has not engaged in physical intervention in the currency, which has been battered this year by a strong US dollar, but has rallied since his appointment. “I am for a stable currency, I am for a realistic rate. I am for market-based, but not subject to a currency being taken hostage” and making speculators billions of dollars, he said.

Published in Dawn, October 16th, 2022