Finance Minister Aurangzeb briefs premier before maiden US sojourn

Published April 13, 2024
Finance Minister Mohammad Aurangzeb meets Prime Minister Shehbaz Sharif in Lahore, on Friday.—APP
Finance Minister Mohammad Aurangzeb meets Prime Minister Shehbaz Sharif in Lahore, on Friday.—APP

• Finance minister to attend IMF-WB spring meetings, hold bilateral meetings with Chinese, Saudi, UAE, Turkish counterparts
• IMF chief urges Pakistan to address key issues before talks for new loan package
• Insists country’s economy doing better, forex reserves rising

WASHINGTON / ISLAM­ABAD: With the government set to enter into a fresh loan agreement with the Inter­national Monetary Fund (IMF), Minister for Finance Mohammad Aurangzeb on Friday called on Prime Minister Shehbaz Sharif and briefed him about his upcoming visit to the United States.

The finance minister discussed with the prime minister his scheduled meetings with the IMF, World Bank and other institutions, the Prime Minis­ter’s Office said in a statement.

Finance Minister Aurangzeb is due in Washington on Sunday (tomorrow) with a team of exp­erts to attend the IMF and World Bank’s spring meetings and initiate talks on a new package of around $6 billion to $8 billion.

The main ministerial meetings and events will take place April 17-19 with other events and activities taking place during the week, April 15-20.

Mr Aurangzeb and his team’s schedule includes bilateral meetings with the heads of the IMF and the World Bank, as well as other senior officials of various international financial institutions. They will also hold bilateral meetings with the finance ministers of China, Saudi Arabia, UAE, Turkiye, and other friendly nations attending this annual event.

They will also represent Pakistan at multilateral meetings and are expected to hold bilateral meetings with US officials, as the meetings are held in Washington.

Meanwhile, IMF Managing Director Kristalina Georgieva said on Thursday that Pakistan still needs to solve some “very important issues” while acknowledging that the country is seeking a new loan arrangement from the lender.

This marks her first public acknowledgement that Pakis­tan is contemplating a potential follow-up programme with the Fund after completing its current $3bn stand-by arrangement (SBA) later this month.

In their meeting, Mr Sharif and Mr Aurangzeb also deliberated over the country’s overall economic situation.

The prime minister has already said in many of his speeches in the recent past that the government have no option but to make another deal with IMF to seek a loan to stable the crippling economy of Pakistan. The agreement is likely to be inked by the end of the current calendar year. Last month, the finance minister expressed hope for reaching a staff-level agreement (SLA) with the IMF by the end of the fiscal year (June 30).

The IMF is also expected to finalise the disbursement of the last tranche of $1.1bn from the existing arrangement during these meetings.

Pakistan urged to address key issues

Speaking at an event at the Atlantic Council, a Washington-based think tank, the IMF chief brought attention to the critical issues in Pakistan’s economy that demand urgent resolution.

“There is a commitment to continue on this path, and the country is turning to the Fund for potentially having a follow-up programme,” Ms Georgieva said, flagging issues that the country still needs to address.

“There are very important issues to be solved in Pakistan: the tax base, how the richer part of society contributes to the economy, the way public spending is being directed and of course, creating … a more transparent environment.”

She said Pakistan was successfully completing its existing programme with the IMF, and the economy was performing somewhat better, with reserves now being built up.

Against the backdrop of Pakistan’s evolving economic landscape, the IMF chief’s call to action indicates that the negotiations for a new arrangement could be long and arduous.

As the finance minister said last month, the specifics of the deal would be discussed during the spring meetings. The minister’s team includes the Secretary of Finance, the Secretary of Economic Affairs, and the State Bank governor.

Pakistan is the fourth-largest debtor nation to the IMF, with a total outstanding debt of $7.72bn. In July 2023, the IMF approved a $3bn loan for the debt-laden country, immediately disbursing about $1.2bn to help with Pakistan’s balance of payments crisis.

If the country secures the new package, it would mark its 24th bailout arrangement with the IMF. The $6bn to $8bn loan would also be its largest to date.

Earlier this month, the IMF’s Director of Communications, Julie Kozack, told reporters in Washington that Pakistan seemed interested in securing its largest loan facility with the IMF thus far. “And, of course, we stand ready to engage in program discussions in the coming months,” she added.

Published in Dawn, April 13th, 2024

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