International Monetary Fund (IMF) Resident Representative for Pakistan Esther Perez Ruiz said on Wednesday that discussions between Islamabad and the international moneylender on the ninth review of $7bn Extended Fund Facility had been “productive” so far.
Pakistan entered a $6bn IMF programme in 2019, which was increased to $7bn earlier this year. The programme’s ninth review is currently pending with remote talks being held between IMF officials and the government for the release of $1.18bn.
“Discussions to date in the context of the 9th review have been productive, and have enabled a revision to the macroeconomic outlook post floods as well as an in-depth evaluation of fiscal, monetary, exchange rate, and energy policies adopted since the completion of the combined seventh and eight reviews,” Ruiz told Dawn.com.
She added that the IMF “looks forward to continue the dialogue over policies that adequately address the humanitarian and rehabilitation needs from the floods while also preserving fiscal and external sustainability given available financing”.
Earlier, Dawn reported that Pakistan and IMF had had a round of engagement on November 18 but could not finalise a schedule for formal talks on the overdue ninth review.
The talks, originally due in the last week of October, were rescheduled to Nov 3 and then kept on facing delays following gaps in estimates by the two sides.
Earlier this month, Finance Minister Ishaq Dar’s interview on a private television channel raised eyebrows when he said he was not concerned whether the IMF team arrived in Pakistan for the ninth review, indicating that there may be an impasse in the ongoing talks.
Appearing on Geo News, the finance minister was questioned about the delayed arrival of the IMF team to which he said: “I don’t care if they come. I don’t have to plead before them. I have to look at Pakistan’s matters.”
A Dawn report last month said Pakistan was behind on multiple performance criteria essential for the completion of the review, with authorities hinting they had asked for some waivers from the financial institution.
For its part, the IMF said in a statement that Pakistan’s “timely finalisation” of a recovery plan from floods was essential to support discussions and continued financial support.
‘Must complete IMF programme for Pakistan’s credibility’
The finance minister addressed the delay in the ninth IMF review again today, stressing the need for Pakistan to complete the programme.
Speaking at the Second Pakistan Prosperity Forum, he said: “I don’t blame the Fund, but let me say that the ninth review in totality — all performance criteria are in order. Had they come in October and reviewed, the ninth review would have been over.”
Dar added, “I don’t want to indulge in global politics, but I did request them to come in late October or early November. They chose not to.”
The finance minister, however, also acknowledged that Islamabad had created a “credibility gap” between the two parties.
“Once you commit to agreed conditionalities … you should implement them,” he said, asserting that a party was “ethically” and contractually“ bound to implement conditions agreed between two sides.
After agreeing “on a roadmap [with the IMF], your country and the previous government chose not to implement [the agreed conditions] and reversed what they had done earlier.
“That has created a credibility gap.”
In light of this experience, the finance minister added, the IMF now wanted the government to share with them plans for the next three quarters.
Moreover, he said, the Fund also required the government to demonstrate how it would meet the needs of $16bn for flood reconstruction and rehabilitation.
“Reconstruction and rehabilitation [efforts] are going to take five to seven years and to worry about it now — I won’t say that beggars are not choosers but lenders have their own wish list,” Dar said.
But, he added, “my endeavour is to complete the programme.
“Let Pakistan have the credit for completing the programme for the second time … I wish for the credibility of Pakistan that we complete this programme.
“I may personally disagree with many things, but I am trying to provide everything and anything. My team is at it.”