ISLAMABAD/LAHORE: Before approving the $3 billion Stand-by Arrangement (SBA), the IMF discussed the key objectives of the short-term program with three mainstream political parties including the PML-N, PPP and Has sought assurance of support from PTI.
In an unusual move, which was made public, the IMF took the initiative to ensure support for the program and get ownership of all political stakeholders on key terms of the nine-month program from July to March 2024.
Earlier such moves were kept as backdoor negotiations. But, this time, IMF Resident Chief Esther Perez Ruiz preferred to make it public by issuing a statement.
This can be considered an unusual move, as the Bretton Wood Institutions (BWIs), such as the IMF and the World Bank, have in the past dealt with states rather than political parties or individuals.
“Pakistan has an unusual situation as the existing nine-month SBA program will be implemented only for a nine-month period with a loan volume of $3 billion,” a senior official said. A loan of $1 billion will be sanctioned and disbursed under the PDM coalition government, another $1 billion under the caretaker setup, and the final installment of $1 billion will be disbursed to the government that emerges from the general elections in the country.
Therefore, it makes sense to take all major political parties into confidence, the official said.
The IMF resident chief said on Friday: “[IMF] staff are meeting with representatives of major political parties in Pakistan, including PMLN, PPP and PTI, to discuss key objectives and policies under a new policy. Their support can be assured. An IMF-supported program ahead of the upcoming national elections.
“As announced, the new SBA with Pakistan is expected to be considered by the IMF Executive Board in the coming days.”
Top finance ministry officials confirmed that the fund’s executive board is scheduled to consider approving a $3 billion SBA loan for Pakistan in its July-12 meeting. But, the IMF calendar has so far not reflected Pakistan’s request for SBA loan approval in its agenda. The IMF can modify the calendar and put Islamabad’s request for SBA approval on its agenda any time before the July 12 board meeting in Washington, DC.
The Resident Chief of IMF arrived at Zaman Park Lahore at 6:30 pm on Friday. Former minister and PTI leader Hammad Azhar tweeted that the IMF team met party chairman Imran Khan at his residence on Friday. The meeting was attended by IMF Country Chief Nathan Porter, who joined virtually from Washington, while Resident Representative Esther Perez was physically present. The PTI team included Chairman Imran Khan, Shah Mehmood Qureshi, Hammad Azhar, Shaukat Tareen, Umar Ayub Khan, Dr. Sania Nishtar, Shibli Faraz, Taimur Jhagra and Muzamil Aslam. The meeting lasted for more than an hour.
Discussions revolved around the Staff Level Agreement (SLA) that the IMF negotiated with the Government of Pakistan for a 9-month $3 billion standby arrangement. “We support overall objectives and key policies,” he tweeted.
“We welcome the SBA to maintain macroeconomic stability by anchoring external fiscal and sound policies ahead of the national elections and until the formation of the new government. want to emphasize the importance of,” he added.
He said that Tehreek-e-Insaf considers political stability and rule of law as essential for the economic stability of Pakistan. After free, fair and timely elections, the new government mandated by the people will initiate reforms and work on a long-term basis with multilateral institutions for economic transformation, higher and more inclusive growth.
Later, PTI Chairman Imran Khan also endorsed the standby arrangement with the IMF, saying that his party would support it till the newly elected government comes to power through fresh elections.
In an online address, he said that 13 months ago, he had started raising this issue before the nation that wrong policies of the country could push Pakistan towards default. He said that when he raised a serious issue, the opponents called him a traitor.
The PTI chairman also said that when the PTI was in power and there was a threat of adding Pakistan to the ‘blacklist’, the PDM leadership did not support the government on the FATF issue. However, he said that in the interest of Pakistan, he has decided to ratify the agreement with the IMF.
The PTI chairman also told his supporters that facing a default means the country may face serious economic problems and inflation may increase manifold.
Meanwhile, Prime Minister Shehbaz Sharif’s coordinator for economics Bilal Azhar Kayani said in his statement that the representative of the IMF is meeting with the leadership of the main political parties. He said that the resident head of the IMF met the leaders of the People’s Party on Thursday.
Kayani said that the resident chief of the IMF met the PTI leaders to assure them that they would not play any trick on Pakistan’s economy. The IMF wanted an assurance that the PTI would not conspire and write any letter to the IMF later.
With reference to the meeting with the leadership of the People’s Party, it was informed that the Resident Chief of the IMF, Esther Perez Ruiz, met the finance team of the People’s Party consisting of the Federal Minister of Commerce Naveed Qamar and Salim Mandviwala. The meeting was held at the Minister’s Enclave to discuss debt standby arrangements with Pakistan, which will have profound implications for the country’s financial stability.
The PPP expressed its willingness to support the IMF program citing the broader national interest as the driving force behind its decision.
Naveed Qamar acknowledged the importance of the standby agreement to address Pakistan’s economic concerns. He reiterated the PPP’s commitment to work in coordination with the IMF to ensure the successful implementation of the programme.
PPP Finance Secretary Senator Salim Mandviwala told The News that the IMF wanted to know the party’s views and was told that the PPP, being part of the coalition government, would be responsible for the $3 billion SBA program for Pakistan. Committed to supporting successful implementation.
Commerce Minister Naveed Qamar, who is also part of the PPP Finance Committee, tweeted that the PPP agreed to support the IMF program in the national interest.
