During the board meeting, the IMF directors raised serious concerns regarding Pakistan’s poor track record in implementing reforms…reports Asian Lite News
After announcing the bailout package for Pakistan, the International Monetary Fund (IMF) conveyed its concerns regarding the poor past record of Pakistan and advised the country to complete the new programme to reduce the trust deficit, Pakistan-based The Express Tribune reported.
The IMF Executive Director Bahador Bijani on behalf of the board has conveyed the message to Pakistan’s Finance Minister Ishaq Dar through a virtual contact on Thursday, The Express Tribune reported citing highly-placed sources. The global lender conveyed the concern a day after the IMF board approved the USD 3 billion Stand-By Arrangement (SBA) programme for Pakistan.
Bahador Bijani is one of the 24 executive directors on the IMF board. According to the sources, the IMF board had asked Bijani to convey the tough message to Pakistan, The Express Tribune reported.
During the board meeting, the IMF directors raised serious concerns regarding Pakistan’s poor track record in implementing reforms and fulfilling commitments made to the IMF board and the management, the sources said, according to The Express Tribune.
According to sources, Bijani conveyed IMF board concerns to Dar so that there was no complacency in Pakistan following the approval of the new programme, the report said.
On Friday, Pakistan Prime Minister Shehbaz Sharif held a telephonic conversation with IMF Managing Director Kristalina Georgieva and assured her that Islamabad was serious this time to bridge the trust deficit.
According to the statement released by Pakistan Prime Minister’s office, Georgieva said that “the IMF board was sceptical about Pakistan’s commitment to fulfilling the conditions of agreement due to the past trust deficit.” However, she assured the board that Pakistan will deliver on its commitments as she had met Pakistan PM and seen his seriousness, according to the statement.
The IMF had last discussed Pakistan’s case in August 2022 and was scheduled to hold a meeting in November 2022 to approve the ninth review, according to The Express Tribune report. However, Pakistan’s case was not discussed until June when the board informally met to decide whether they should give it a chance to Pakistan despite its poor track record.
On June 30, the IMF announced a staff-level agreement with Pakistan which the board approved this week. According to sources, the IMF board has communicated to Pakistan that this was the last chance for Pakistan to improve its poor standing. The IMF board asked Pakistan to implement the new programme and further stated that they will no longer give any concession.
The IMF board also advised Pakistan to complete the ongoing programme so that the trust deficit between both sides was minimised. On Thursday, the IMF’s Director of Strategic Communications Julie Kozack said that “steadfast implementation” of the nine-month Stand-by Arrangement (SBA) was critical for Pakistan’s future.
In a statement, Julie Kozack said, “Steadfast implementation is critical to address its large financing needs and support the most vulnerable, according to The Express Tribune. The communications director said that resolving Pakistan’s structural challenges will likely need continued reforms over the medium term to carry out economic transformations for strengthening the growth prospects and creating a conducive environment to renewed private capital inflows.
The board members were also critical of Pakistan’s lack of consistency in reforms and its failure to honour its commitments, according to The Express Tribune report. This is the 23rd programme that has been signed between Pakistan and IMF. However, only one programme has been fully implemented that too due to the support of a series of waivers against key conditions.
Although Pakistan has so far shown the resolve to implement the current programme, however, it might prove challenging for Islamabad due to the involvement of three governments from now till the expiry of the programme in March next year.
On Wednesday, the International Monetary Fund (IMF) approved a 9-month Stand-By arrangement for Pakistan to support the country’s economic stabilization program, Pakistan-based Geo News reported.
IMF in a statement said, “Today, the Executive Board of the International Monetary Fund (IMF) approved a 9-month Stand-By Arrangement (SBA) for Pakistan for an amount of SDR 2,250 million (about USD 3 billion, or 111 percent of quota) to support the authorities’ economic stabilization program.” (ANI)