ISLAMABAD: Pakistani authorities and the International Monetary Fund (IMF) are blaming each other for the delay in revitalizing the bailout program, JEE News reported on Tuesday, citing sources.
Official sources told the publication on Monday that the IMF and Pakistani parties are holding each other responsible for “unnecessary delays” in completing the outstanding ninth review and reviving the stalled program after a gap of about 80 days. have been doing since both sides completed Islamabad. Negotiations on February 9
Pakistan has less than a month’s worth of foreign exchange reserves and is awaiting a $1.1 billion bailout package from the IMF that has been delayed since November due to issues related to fiscal policy adjustments.
The funds, which can be released after the signing of a staff-level agreement, are part of a $6.5 billion bailout package approved by the IMF in 2019, which analysts say will boost Pakistan’s external payments. Important to avoid lapses in responsibilities.
According to a report published today in JEE News, Pakistan’s options to revive the IMF program are shrinking with each passing day. It is yet to be determined how the country will proceed to meet the current IMF program, which expires on June 30, 2023.
The eleventh review of the IMF under the Expanded Fund Facility (EFF) program will take place tomorrow (Wednesday) at a time when Islamabad is still unable to complete the pending ninth review.
The two sides had so far been unable to agree on staffing levels to complete the ninth review. The 10th review under the IMF program was supposed to take place on February 3, but it could not take place.
IMF sources told the publication that they are still waiting for confirmation of external financing needs, despite Islamabad guaranteeing an additional $3 billion in deposits from Saudi Arabia and the United Arab Emirates. .
The IMF is now seeking confirmation of the remaining $2 billion from the World Bank and $900 million from the Asian Infrastructure Investment Bank and commercial loans from banks.
Without an additional $2-3 billion confirmed, the Washington-based lender is reluctant to attack the deal. On the other hand, the Pakistani authorities were of the view that the fund was playing politics with the Pakistani side as the agreement should have been signed long ago.
Sources further said, “This is nothing but a political game going on.
Dr Khaqan Najib, former adviser to the Ministry of Finance, told JEE News that the extraordinary delay raises questions about the difficulties in completing the tenth and eleventh reviews (over $1 billion) scheduled for February 3 and May 3 respectively.
Whether it is delay in price adjustment, circular debt management plan, financing gap filling, petrol cross-subsidy, or payment of election expenses or something else is moving to stall the staff level agreement, he said.
“Of course, external events and geopolitics have their share in complicating the image of Pakistan.”
Dr. Najib added that it is very unfortunate that this is happening at a time of very serious domestic economic crisis and a challenging global scenario.
“IMF is a lender of last resort, maybe it can move in that spirit. It is not a good option for Pakistan to be close to the brink of default,” he said, adding that in the short term funding from friendly countries and I Reorganization of the MF programme, clarification of program completion dates and minimal work on budget 2023-24 is required.
