• Fund seeks assurances from PTI, PPP leaders; both parties endorse $3bn agreement
• Hammad says PTI supports ‘overall objectives and key policies’ for macroeconomic stability
ISLAMABAD: In a ‘rare’ move, ostensibly to seek assurances from political parties for a new lender-supported programme, a team from the International Monetary Fund (IMF) held meetings with the PTI and PPP leadership to gain support for the implementation of the $3 billion standby arrangement.
The meetings came almost a week before a meeting of the IMF executive board will review the $3 billion arrangement for Pakistan on July 12, after a staff-level pact was finalised.
Pakistan was absent from an earlier schedule released in June, igniting speculation that the IMF was not going to release funds from an earlier programme that expired on June 30.
On Friday, IMF Resident Representative Ester Perez Ruiz met with the economic teams of the PPP and the opposition PTI.
However, it is not yet known whether the IMF team will meet other members of the coalition government — including the JUI-F led by Maulana Fazlur Rehman who also heads the ruling coalition PDM.
Ahead of meetings, Ms Ruiz said that IMF staff was in the process of meeting with representatives of 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 programme ahead of the approaching national elections.
Economist Dr Ashfaque Hassan Khan, who has also advised the government in the past, told Dawn that the IMF team’s meetings with political parties were somewhat out of the ordinary.
He explained that before any programme, IMF officials typically met stakeholders, such as representatives of chambers, banks, and labour unions. “I don’t recall such [political] meetings,” he added.
However, others speculated that since the SBA agreed with the IMF envisions elections being held this year, the Fund seems to be counting on negotiating a fresh programme with the incoming government, whoever forms it.
In recent months, the IMF has been at pains to clarify that it does not favour any particular party over the other and will negotiate with whichever party forms the next government. Some observers feel that these meetings should also be viewed in the same context.
Meeting with PPP
As part of the move, the IMF representative consulted with the economic team of the PPP, a crucial member of the coalition government, to gain their backing.
Commerce Minister Naveed Qamar told Dawn that the meeting “only discussed the standby agreement, nothing else”. He added that the IMF wanted across-the-board support, but there had been no discussion about the future.
According to the PPP leader, the IMF wanted political input on the matter and was informed by the party that the PPP, as part of the government, supported the agreement and the need for the IMF programme.
He explained that without the programme, there would be severe repercussions for the economy. Mr Qamar also mentioned that this was the first time discussions with political parties took place.
During the last IMF programme, the Fund interacted with members of the National Assembly’s finance committee. He clarified that no talks regarding elections were held, as it was not the mandate of the IMF team.
This development occurs as numerous analysts warn that the uncertain political climate in Pakistan may derail the IMF program. The coalition government’s term is set to end in a month, with a caretaker government taking over for three months to oversee the next general elections.
PTI welcomes agreement
Later in the day, Ms Ruiz called on former prime minister Imran Khan at his Zaman Park residence in Lahore. The meeting was attended by IMF’s Pakistan mission chief Nathan Porter, who joined the discussion virtually from Washington.
PTI’s team included party chief Imran Khan, Shah Mehmood Qureshi, Hammad Azhar, Shaukat Tarin, Omer Ayub Khan, Dr Sania Nishtar, Shibli Faraz, Taimur Jhagra and Muzammil Aslam. The meeting lasted for more than an hour.
PTI leader Hammad Azhar said discussions took place around the staff-level agreement that IMF reached with the government for a nine-month $3bn stand-by arrangement. “We support the overall objectives and key policies,” Mr Azhar said.
“We welcome the SBA to preserve macroeconomic stability by anchoring external financing and sound policies ahead of the national elections due in the fall this year and until a new government is formed,” the statement further said.
“We wish to stress the importance of programme to protect the lower-income segments of the population from high inflation,” it said.
The PTI leader said that following free, fair, and timely elections, a new government mandated by the people will initiate reforms and engage on a longer-term basis with multilateral institutions to further economic transformation, higher and more inclusive growth, the statement further said.
Mr Azhar stated that the PTI chairman stressed the importance of the programme to protect the lower-income segments of the population from inflation. He stated the PTI considered political stability and rule of law as integral to the economic stability of Pakistan.
No comments from govt
The government remained silent about the meeting between the IMF team and PTI Chairman Imran Khan and his team. It is also unclear whether the government was in the loop about the IMF meetings with the PPP and PTI.
Previously, the government reacted to a statement from the IMF about political stability, calling it interference in the country’s internal issues.
Coordinator to PM on Economy and Energy Bilal Azhar Kayani was the only one to react, criticising the opposition party for celebrating their meeting with the IMF after violating the agreement during their tenure.
Mr Kayani stated that Imran Khan and his team should not hatch any new conspiracies against the new deal, as the IMF team was meeting all political parties, not just them.
Mansoor Malik in Lahore also contributed to this report
Published in Dawn, July 8th, 2023