ISLAMABAD: If the International Monetary Fund (IMF) continues to delay the recovery of the already delayed $6.5 billion bailout program, Pakistan is now looking for a Plan B to prevent a full blown balance of payments crisis. Looking for
According to a report in JEE News, the cash-strapped country of more than 220 million people will have no choice but to come up with a mechanism to bail out China’s ailing economy. said for
“Amid the deepening political and economic crisis in the country, the IMF has adopted a wait-and-see policy, but it cannot be implemented for long,” sources told the publication.
“Either the IMF program will have to be reinstated after the completion of the ninth review or the program will be terminated. We will not share any more data with the IMF without the completion of the ninth review.” Sources asserted.
Multiple reports suggest that Pakistan has already informed the fund’s staff to complete the review or else the 2023-24 budget framework will not be shared.
Sources recalled that an ambassador from the western capital asked a minister during a conversation when Pakistan’s economy was expected to collapse.
“This blunt question of Ms. shocked the minister who told the visiting diplomat that Pakistan would never default,” sources said.
It should be noted that the diplomatic community has also started making inquiries about “domestic political matters”.
With all these developments in mind, independent economists are now suggesting that the government make a last-ditch effort to revive the IMF program or explicitly look to China to bail out the struggling economy. can go.
Former finance minister and renowned economist Dr. Hafeez A. Pasha said that if the IMF does not step forward, Pakistan will have no other option but to request China to help Islamabad out of a full-blown crisis. A procedure should be devised for this.
He said that Asian Infrastructure Investment Bank (AIIB) can be used as an instrument to help Islamabad to avoid balance of payment crisis as we know that is not its mandate but no There should also be an institution that plays the role of the Asian IMF.
When contacted, Dr. Khaqan Najeeb, former adviser to the Ministry of Finance, said that the country has undoubtedly taken many steps for macro stabilization and paved the way for the completion of the ninth review.
However, given the weak reserve position of only $4.38 billion with the State Bank of Pakistan and the uncertain balance of payments position, the IMF is more cautious in ensuring that financing requirements are met more than adequately. go
The authorities have tried but failed to convince the lender in this regard.
Dr. Najib also pointed to easing of imports. The IMF will look to build reserves and ease administrative restrictions for Pakistan, which halved Pakistan’s imports in April (year-on-year) to just 2.9 billion, according to data released by the Pakistan Bureau of Statistics. It has reached billion dollars.
“The recommended solution is for the IMF to consider because a staff-level agreement could reduce trade and multilateral inflows,” Najib said, adding that Pakistani officials would likely Can do more to ensure an airtight financing plan.
He said that in the absence of an agreement between the two sides, the country would have to continue with strict import restrictions, a stagnant economy, and loans and rollovers from friendly countries and others wherever possible.
“This is not the preferred option for Pakistan to continue with a constrained economy,” he concluded.
