By Staff Reporter
ISLAMABAD: Pakistan’s Finance Minister Ishaq Dar will meet an International Monetary Fund (IMF) delegation on the sidelines of a conference in Geneva next week to unlock a stalled bailout programme.
“The IMF delegation is expected to meet with Finance Minister Dar on the sidelines of the Geneva conference to discuss outstanding issues and the path forward,” a spokesperson of the IMF said in a statement to media on Sunday.
The IMF statement comes two days after Prime Minister Shehbaz Sharif said he held talks with the IMF chief Kristalina Georgieva to break the deadlock over ninth review for the release of the next tranche of funding under an Extended Fund Facility (EFF).
PM Sharif, though, said a delegation from the IMF would travel to Islamabad in ‘two to three days’ to finalise the review.
The fund’s programme is a lifeline to the country as Pakistan is in an economic crisis, facing high inflation, a depreciating currency, depleting foreign currency reserves, and a ballooning current account deficit. It has been struggling to pay for its imports and debt obligations as its official liquid foreign exchange reserves shrank to $4.5 billion.
The slump in reserves comes after the repayment of loans worth $1.2 billion to United Arab Emirates based banks. A breakup shows that the country returned $600 million to Emirates Bank and $420 million to Dubai Islamic Bank.
Finance Minister Dar, however, told a private television channel that the reserves currently stand at $10 billion as “$6 billion held by commercial banks also belong to the country”.
The minister also hoped that funds from friendly countries, including Saudi Arabia, will be transferred to Pakistan soon and “will help improve the country’s foreign reserves”.
The minister faced heat on social media for his remarks on reserves.
Pakistan’s ninth review of staff-level talks with the IMF for the release of its next tranche has been delayed since September, though finance minister Dar repeatedly said all targets for the IMF’s ninth review had been completed.
Pakistan entered the $6 billion IMF programme in 2019, which was raised to $7 billion this year. The country will get $1.18 billion after the programme’s ninth review.
The ongoing parleys have so far remained inconclusive mainly because of the inability of both sides to strike a consensus on four major contentious issues, including energy sector circular debt that has peaked at Rs4.17 trillion.
The IMF spokesperson also said the fund chief Georgieva had a ‘constructive call’ with PM Sharif regarding the Geneva conference and supported Pakistan’s efforts to rebuild flood hit areas.
Geneva moot
Pakistan and the United Nations are holding the conference on Monday to mobilize support for a recovery from last year’s climate-induced catastrophic floods. The country is expected to seek $16.3 billion in aid from the international community for rehabilitation and reconstruction of flood-hit areas.
The country needs about $30 billion to cover the short and long-term needs of the victims of last year’s floods. It would meet half the funding from its own resources.
Additional funding is crucial to the country amid growing concerns about its ability to pay for imports and to meet sovereign foreign debt obligations.
However, it is far from clear where and when the money will come from, especially given difficulties raising funds for the emergency humanitarian phase of the response which is around half funded.
“The donors’ committed amount will be disbursed over a medium to long-term basis depending upon the tenure of completion of the project. No inflows from them are likely for the immediate requirement to build up foreign exchange reserves” said an official.
PM Sharif will co-host the event with UN Secretary-General Antonio Guterres and delegates from 40 nations, including several heads of state, representatives of international financial institutions and development organizations, will attend the International Conference on Climate-Resilient Pakistan.
Before embarking on the visit, PM Sharif in a series of tweets said that he would present the case of flood victims before the world.
“Millions of Pakistanis affected by unprecedented devastation look for compassion and solidarity to build back better,” Sharif said before leaving for Geneva.
“We will place a comprehensive post-disaster framework plan for recovery, rehabilitation and reconstruction with resilience before development partners and friendly countries,” he said. “Bridging funding gap is key to restore critical infrastructure, rebuild lives and livelihoods and revive economy.”
Earlier, PM Sharif in an article for The Guardian newspaper said that Pakistan needed $16.3 billion for the first three years in the first phase of the reconstruction of the flood-hit areas and another $13.5 billion would be needed for the next 10 years to completely rebuild the areas devastated by the floods.
In the monster downpour, last summer that inundated one-third of Pakistan, approximately 1,700 people lost their lives, and close to 13,000 are injured. Around 7.9 million are still displaced. Women and children make up nearly 70 percent of the 33 million affected and one-third of all recorded deaths and injuries are children.
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