By Staff Reporter
ISLAMABAD: The long-awaited ninth review of the $7 billion International Monetary Fund (IMF) bailout program is proceeding smoothly, Finance Minister Ishaq Dar on said on Saturday, a day after cancelling his scheduled trip to Washington for the spring meetings of the IMF and World Bank.
The finance minister addressed the nation to calm the fears that the cancellation of his trip was any indication of the future of the IMF deal.
Dar said everything required from Pakistan to conclude the much-delayed review was “now complete”, and the only hitch for the IMF deal to go through was the confirmation of a $1 billion commitment from a friendly country.
“In the past two weeks, one of our friendly countries has again given them (the IMF) the confirmation [of its commitment to help Pakistan] with $2 billion,” Dar said in his address to the nation.
“We are now only awaiting the confirmation of a USD 1 billion commitment from one friendly country. After that, all their requirements to conclude the staff-level agreement will be complete. Following that, it takes two more weeks to take the matter into the board meeting.”
While Dar did not name the two countries, junior finance minister Aisha Ghaus Pasha on Thursday said Saudi Arabia had conveyed to the IMF its commitment to provide financing to Pakistan. A confirmation of $1 billion was awaited by the United Arab Emirates.
“The two-month delay from mid-February was due to this reason,” Minister Dar said.
Dar acknowledged that there was a new development with the IMF deal over the past few weeks due to the “cross-subsidy” in the works regarding fuel prices.
He said the subsidy involved charging more to the affluent and providing relief to the underprivileged, adding that it had nothing to do with the budget.
“We also had several rounds of communication with the IMF. As soon as that news broke they asked us what we were trying to do. We gave them a satisfying answer because that subsidy is not a part of the budget.”
Dar hinted that the hold-up to the ninth review had more to do with the IMF’s part than the government’s.
“When I went to the IMF with my delegation in October 2022, I invited them to Pakistan for the ninth review, which is technically the September 2022 review,” he said. “For unknown reasons, they finally came to Pakistan in January 2023.”
Dar acknowledged that the nine-day review was “the most difficult negotiations” and it was concluded, which led to the government taking prior actions demanded by the IMF, including the imposition of new taxes worth Rs170 billion.
The minister rejected reports of the canceled trip being linked to a holdup in Pakistan’s IMF bailout program.
Dar said the recent Supreme Court order striking down plans to delay elections to two provincial assemblies scheduled for next month has compounded the country’s financial and political crisis.
“We are stuck in a strange mess as a country… a constitutional crisis has been created in Pakistan… due to these circumstances and on the prime minister’s directives, I have dropped my plan to visit Washington,” the minister said.
“This is not an unusual thing. Virtual meetings took place during Covid. I will be attending the World Bank, and IMF meetings that I’m required to attend from Islamabad.”
The minister said that even though he won’t be attending the meetings in person, a delegation representing Pakistan will be there.
“It’s astonishing that some are saying that I have been told not to go by the IMF. The IMF cannot tell me not to attend. Pakistan is a member of the World Bank and the IMF. It is not a beggar.”
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