Pakistan’s state minister for finance slams IMF for interfering in domestic affairs

By Aamir Latif

KARACHI, Pakistan (AA) - Pakistan’s state minister for finance and revenue on Wednesday slammed the International Monetary Fund for “intervening” in the country’s internal matters.

“Pakistan’s conduct is in line with the law,” Aisha Ghaus Pasha told reporters in the capital Islamabad.

Her remarks came after Nathan Porter, the IMF’s mission chief for Pakistan, said on Tuesday that the monetary agency hopes they can find a “peaceful way forward in line with the Constitution and the rule of law.” He was referring to a deepening political turmoil that has gripped the South Asian nuclear nation since the ousting of former Prime Minister Imran Khan through a no-trust vote in April last year.

Pasha dubbed Porter’s statement “extraordinary” since the IMF does not comment on domestic politics.

Islamabad has been negotiating with the IMF since early February to release $1.1 billion, part of a $6.5 billion bailout package that was inked in 2019 by Khan’s government. To meet the IMF’s stringent demands, Prime Minister Shehbaz Sharif and his coalition government have cut back on subsidies, removed an artificial cap on the exchange rate, mounted taxes, and hiked fuel and electricity prices.

The country has been engulfed by unrest since Khan was arrested earlier this month. Arrests, court cases, and the future of Khan and his Pakistan Tehreek-e-Insaf (PTI) party dominate the daily news cycle, but beneath it all lurk persistent fears of a default with repercussions that would spread beyond the political realm.

Reports from local and international organizations warn that Pakistan’s economy is failing.

- Agreement with IMF likely before budget

Economists think that Pakistan has to secure a deal with the IMF to ease growing fears and lower the default risk. Porter hoped that the IMF and Islamabad would reach a staff-level agreement before the announcement of the federal budget for the fiscal year 2023-24, which is expected to be unveiled next week.

Last week Prime Minister Shehbaz Sharif requested IMF Managing Director Kristalina Georgieva to help Pakistan revive the stalled $6.5 billion facility. There is about $2.7 billion left to be disbursed from the previously inked $6.5 billion program, and it is scheduled to expire next month. If Islamabad fails to convince the IMF to release the stalled tranches, “there is always a Plan B, but our priority is to revive the IMF program,” Sharif said.

On Sunday, Finance Minister Ishaq Dar said Pakistan will share its budget details with the IMF, adding that he would like the fund to clear its ninth review before the budget as “all the conditions for that had already been met.” He said it would not work for Pakistan if the IMF combined the ninth and the tenth reviews of the bailout package. “We will not do it; we see this as unfair,” he maintained.

Pakistan’s longtime ally China has committed to providing fresh funds to help the country meet two crucial debt repayments in June worth $2.3 billion immediately after Pakistan makes the payments.

Islamabad also expects Beijing to roll over more than $2 billion in debt due next month.