Pakistan will not default, says finance minister amid IMF stalemate

Pakistan will not default, says finance minister amid IMF stalemate

By Staff Reporter

ISLAMABAD: Pakistan’s Finance Minister Ishaq Dar said on Saturday there was no technical reason for the delay in resuming a $6.5 billion International Monetary Fund (IMF) programme that has been stalled since November, and assured the country would not default on its debt obligations.

“The delay in the IMF program is unprecedented as there is no technical reason behind it,” Dar, who met with a business delegation in Islamabad to discuss budget proposals, said.

Dar said the government has implemented the “most difficult” economic reforms while reiterating that the country would not default.

The minister said Pakistan had successfully completed the previous IMF programme from 2013 to 2016 and had implemented the most difficult economic reforms.

“Our first priority is there is no delay in the country’s sovereign commitments. Fortunately, there have been no such delays,” said Dar. “If we have $100 billion in external debts, we also have assets, and one of our assets, the gas infrastructure, alone costs $40 to $50 billion, which is 50 percent of the debt.”

“No one is saying internationally that Pakistan will default… . In fact, the MD [managing director] of the IMF issued a statement a few weeks back that Pakistan will not default. Their broad discussions center around how is Pakistan surviving.”

Pakistan’s bailout programme with the IMF has been stalled at the ninth review, while talks on the staff-level agreement have dragged on over securing necessary financing assurances to bridge the balance of payments gap.

The country has for months been struggling with an acute balance-of-payment crisis, with inflation hovering at a record high, currency depreciating fast and foreign exchange reserves at critically low levels.

Pakistan is making desperate attempts for the revival the program that would release a $1.1 billion bailout tranche. The program is due to expire on June 30, with the government expected to present the federal budget next week.

Minister of State for Finance Aisha Ghaus Pasha earlier said the delay was because the IMF was not ready to reduce the external financing requirement to $3 billion.

Dar said his government would try to come up with new ideas to steer the country out of the present crisis. “Our main purpose today is just to reassure you, that we will be coming out of [this crisis] and come up with new ideas in the weeks to come,” he said.

“There will be the budget and after that, we will also do things for Pakistan’s long-term betterment.”

Referring to statements by ex-finance minister Miftah Ismail about the country moving toward bankruptcy, Dar said “some people were fond of” predicting dates when the country would default.

“They say the country would default in two to three months. They should be ashamed of themselves,” he added.

Copyright © 2021 Independent Pakistan | All rights reserved

Related

Pakistan will not default, says finance minister amid IMF stalemate

By Staff Reporter

ISLAMABAD: Pakistan’s Finance Minister Ishaq Dar said on Saturday there was no technical reason for the delay in resuming a $6.5 billion International Monetary Fund (IMF) programme that has been stalled since November, and assured the country would not default on its debt obligations.

“The delay in the IMF program is unprecedented as there is no technical reason behind it,” Dar, who met with a business delegation in Islamabad to discuss budget proposals, said.

Dar said the government has implemented the “most difficult” economic reforms while reiterating that the country would not default.

The minister said Pakistan had successfully completed the previous IMF programme from 2013 to 2016 and had implemented the most difficult economic reforms.

“Our first priority is there is no delay in the country’s sovereign commitments. Fortunately, there have been no such delays,” said Dar. “If we have $100 billion in external debts, we also have assets, and one of our assets, the gas infrastructure, alone costs $40 to $50 billion, which is 50 percent of the debt.”

“No one is saying internationally that Pakistan will default… . In fact, the MD [managing director] of the IMF issued a statement a few weeks back that Pakistan will not default. Their broad discussions center around how is Pakistan surviving.”

Pakistan’s bailout programme with the IMF has been stalled at the ninth review, while talks on the staff-level agreement have dragged on over securing necessary financing assurances to bridge the balance of payments gap.

The country has for months been struggling with an acute balance-of-payment crisis, with inflation hovering at a record high, currency depreciating fast and foreign exchange reserves at critically low levels.

Pakistan is making desperate attempts for the revival the program that would release a $1.1 billion bailout tranche. The program is due to expire on June 30, with the government expected to present the federal budget next week.

Minister of State for Finance Aisha Ghaus Pasha earlier said the delay was because the IMF was not ready to reduce the external financing requirement to $3 billion.

Dar said his government would try to come up with new ideas to steer the country out of the present crisis. “Our main purpose today is just to reassure you, that we will be coming out of [this crisis] and come up with new ideas in the weeks to come,” he said.

“There will be the budget and after that, we will also do things for Pakistan’s long-term betterment.”

Referring to statements by ex-finance minister Miftah Ismail about the country moving toward bankruptcy, Dar said “some people were fond of” predicting dates when the country would default.

“They say the country would default in two to three months. They should be ashamed of themselves,” he added.

Copyright © 2021 Independent Pakistan | All rights reserved