IMF 'Not Being Fair' To Pakistan, Claims FM Bilawal Bhutto Zardari
Islamabad: Pakistan Foreign Minister Bilawal Bhutto Zardari has claimed that the International Monetary Fund (IMF) is "not being fair" to Pakistan, as the country is facing serious crises.
In an interview with the Associated Press on Friday, Bilawal Bhutto said that Pakistan was facing an economic crisis, the consequences of last year's catastrophic flooding and terrorism which was "once again rearing its ugly head", Daily Pakistan reported.
The foreign minister criticised the IMF for delaying the loan program. He said the PPP supported expanding revenue collection and believed those who were well off should pay more. He said that Pakistan had been unable to achieve structural tax reform.
The IMF is "not being fair" to Pakistan, which is also dealing with 1,00,000 new refugees following the West's withdrawal from Afghanistan.
He further said that the IMF was stretching out talks at a time when the country needed money to help the "poorest of the poor".
He further said that Pakistan had a "very healthy economic relationship" with China that was "also in the spotlight as a result of geopolitical events".
Cash-strapped Pakistan is in a race against time to implement measures to reach an agreement with the IMF, Daily Pakistan reported.
The agreement with the IMF on the completion of the ninth review of a USD 7 billion loan programme, which has been delayed since late last year, would not only lead to a disbursement of USD 1.2 bn but also unlock inflows from friendly countries.
The prerequisites by the lender are aimed at ensuring Pakistan shrinks its fiscal deficit ahead of its annual budget around June.
As a last step, the international lender has required Pakistan to guarantee that its balance of payments deficit is fully financed for the remaining period of an IMF programme.
Amidst political uncertainty saturating and economic plight worsening further, the most critical question for Pakistan is now whether it could make the bailout package of International Monetary fund (IMF) or not.
Notwithstanding the fact that the crisis-hit country has completed a major part of IMF conditionality, glitches still remain with regard to external financing requirement.
And this is important for the release of USD 1.1 billion of a USD 6.5 billion IMF bailout agreement as time is running out. The bailout ends at the close of this fiscal year which concludes June 30, 2023.
Contrary to it, the fact is that "all IMF programme reviews require firm and credible assurance that there is sufficient financing to ensure that the borrowing member's balance of payments is fully financed over the remainder of the programme", IMF's Resident Representative Esher Perez told Reuters.
The next tranche of the IMF bailout package would depend on Pakistan's quick measures to arrange for full financing of its balance of payments deficit for the fiscal year 2022-23.
IMF has been negotiating with Islamabad since early last month to clear its ninth review, but Pakistan is finding the IMF conditionality not only difficult to meet but also politically unpopular.
Despite this, Islamabad has embraced the bitter pill of IMF conditionality because it has come on the verge of default and economic collapse.
Pakistan is undertaking several measures including increase in GST and excise duties, reduction in subsidies, adjustment in energy prices and artificial curbs on the exchange rate to meet IMF conditionality for releasing the bailout package. But these measures are causing lots of inconvenience to ordinary people in the country.
First, Islamabad unveiled a supplementary budget on February 15 which approved a new tax on electricity users, including farmers to raise an additional PKR 170 billion in revenue to meet IMF conditionality.
It also approved the discontinuation of power tariff subsidies to zero-rated industries as well as the Kissan package with effect from March 1 to fulfill other prior action conditions by the IMF.
Secondly it hiked petrol and high-speed diesel prices which put economic burden on the people who are already reeling under ever spiralling inflation.
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