By Staff Reporter
ISLAMABAD: Pakistan Finance Minister Ishaq Dar on Thursday accused geopolitics of being behind a stalled loan program with the International Monetary Fund (IMF), saying the Fund wanted Pakistan to default like Sri Lanka and then enter negotiations.
Testifying before the Senate’s standing committee on finance, Dar said no reason had been given by the IMF for the “unnecessary delay” behind the ninth review, which has been pending since November.
He said he believed the IMF was delaying the review because it wanted Pakistan to default so that it could then enter negotiations from a position of strength.
“This is geopolitics,” he said. “The IMF wants to see Pakistan default so that it can then come and dictate terms.”
Dar said the government had other options available to it if the IMF did not agree to a deal, including seeking help from China or other friendly countries.
He said he was confident that Pakistan would be able to meet its financial obligations, with or without the IMF’s help.
“IMF or no IMF, Pakistan will not default,” he added.
Dar said the government had met all of the IMF’s demands, including arranging guarantees for $3 billion from friendly bilateral partners, but that the Fund was still delaying the review.
The IMF has been providing Pakistan with a $6.5 billion bailout since 2019. The ninth review of the programme is necessary for Pakistan to receive the next tranche of funds.
The delay in the review has raised concerns about Pakistan’s ability to meet its financial obligations. The country’s foreign exchange reserves have fallen to their lowest level in years, and the government has imposed restrictions on imports in an effort to conserve foreign currency.
Dar also rejected the IMF’s objections to tax exemptions in the budget and said he was not ready to accept every demand of the Fund.
The minister said he had shared the budget for the next fiscal year with the IMF on the advice of the prime minister, and the country had the right to give some tax concessions to various sectors, while the IMF wanted it to eliminate all such incentives.
“Pakistan is a sovereign country, and we will not accept everything the IMF demands,” Dar said. “We will negotiate with the IMF, but we will not be bullied.”
Dar said there were three pending issues with the IMF, including market-based exchange rate, budgetary framework, and external financing gap.
He said the IMF wanted Pakistan to match its exchange rate with the grey market rate in a neighboring country, which he said was not feasible.
“The IMF’s demands are not in Pakistan’s best interests,” Dar said. “We will not accept them.”
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