PM Shahbaz Sharif image source The News International
The International Monetary Fund (IMF) has expressed satisfaction with Pakistan’s confirmation of obtaining crucial bilateral support from key partners, and eagerly anticipates further assurances of financing to conclude the much-awaited ninth review of a $7 billion loan program.
This statement from the IMF follows Finance Minister Ishaq Dar’s announcement that the UAE has reaffirmed its commitment to provide $1 billion in bilateral financial support to Pakistan, bringing the country closer to securing the deal and avoiding default.
The finance minister also revealed that the State Bank of Pakistan has received the third and final disbursement of $300 million from the Industrial and Commercial Bank of China (ICBC), out of its $1.3 billion loan, on the same day as the confirmation of bilateral support.
In a statement, Nathan Porter, the IMF Mission Chief to Pakistan, expressed satisfaction with the recent announcement of significant financial support from key bilateral partners to Pakistan.
He stated that during meetings between the Pakistani delegation and IMF staff and management, there was agreement on the importance of maintaining strong policies and securing adequate financing to support the implementation efforts of the authorities.
The IMF is actively supporting these efforts and is looking forward to obtaining the necessary assurances as soon as possible to facilitate the successful completion of the 9th review of the Extended Fund Facility (EFF).
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This indicates that Pakistan is still anticipating additional funds from friendly countries. Jihad Azour, who heads the IMF’s Middle East and Central Asia Department, recently stated that the IMF is working closely with Pakistan and its bilateral donors to ensure that Islamabad receives the required financial support to stabilize its economy.
During a Thursday afternoon briefing held in Washington as part of the World Bank Group’s spring meetings, Jihad Azour dismissed the notion that the IMF was imposing terms on Pakistan.
On the same day, Kristalina Georgieva, the Managing Director of the IMF, expressed hope that the current program with Pakistan would be successfully completed, stating at a news briefing in Washington, “My hope is that with the goodwill of everyone, with the implementation of what has been already agreed by the Pakistani authorities, we can complete our current program successfully.”
These recent developments mark a significant step forward in finalizing a long-delayed staff-level agreement (SLA) with the IMF and unlocking multilateral disbursements.
Since early February, Pakistan has been engaged in negotiations with the IMF to revive the $7 billion bailout program in order to secure a $1.1 billion tranche.
Pakistan’s objective has been to obtain payments from friendly countries, as stated by Prime Minister Shehbaz Sharif last month, who emphasized that external financing commitments from friendly countries must be fulfilled before bailout funds are released.
As a result, on April 6, the state minister of finance announced that Saudi Arabia had made a commitment to provide funding to Pakistan, joining other friendly countries such as China and the UAE in supporting Pakistan’s balance of payments.
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Meanwhile, Prime Minister Shehbaz Sharif lamented on Saturday that his government had inherited a severely compromised IMF agreement. However, he expressed unwavering determination to overcome these challenges by swiftly negotiating a new deal with the lender.
Addressing an event in Lahore earlier today, the premier stated that Pakistan would soon break free from the constraints of the IMF, which would be a moment of immense joy for the country.
He acknowledged that the government had been compelled to accept the stringent conditions set by the IMF due to a lack of alternatives. He revealed that the IMF’s latest condition was to secure billions of dollars from friendly countries.
PM Shehbaz acknowledged that China had recognized the difficulties in fulfilling the conditions imposed on Pakistan two months ago. He commended China’s decision to roll over a $2 billion loan last month, which had provided relief during the acute balance of payments crisis. He also expressed gratitude to Saudi Arabia, the UAE, and Qatar, which he referred to as “Pakistan’s best friends.”
Shehbaz credited Foreign Minister Bilawal Bhutto-Zardari, Ishaq Dar, and Chief of Army Staff General Asim Munir for their unwavering efforts. He praised their tireless struggle, hard work, and sacrifices in securing support from friendly countries.
He further asserted that all the conditions of the IMF had been fulfilled, leaving the lender with no excuse for further delays in signing the agreement. He expressed hope that the loan would be granted expeditiously, but also emphasized the need for Pakistan to explore ways to become self-sufficient and prosper.
