ISLAMABAD: On Wednesday, the United States questioned Pakistan about its backup plan in case the International Monetary Fund (IMF) programme ended next week without disbursing the $1.2 billion third-to-last loan tranche.Donald Blome, the US Ambassador, brought up the subject at a meeting with Finance Minister Ishaq Dar in the Q Block, according to representatives of the finance ministry.
The four-year IMF scheme may experience the same failure as the 21 prior programmes, making the “plan B,” as Pakistani authorities refer to it, the most sought-after blueprint. After Dar briefed the top US diplomat in Islamabad on the government’s attempts over the past few months to resurrect the $6.5 billion rescue package, Blome asked a question.
The gathering happened the day before Prime Minister Shehbaz Sharif was scheduled to meet with Kristalina Georgieva, the IMF’s managing director, outside of the Paris Climate Finance Summit. On Wednesday, the PM travelled to Paris for a two-day stay. Even this week’s conversation with ambassadors from the West, Europe, and Asia did not yield the anticipated outcomes, despite the premier’s efforts to enlist the managing director’s assistance.
In the past month, PM Sharif has spoken on the phone with Kristalina and sent her three letters outlining Pakistan’s attempts to restart the delayed programme. According to sources, Dar just briefly discussed the backup plan but did note that the nation was able to survive without the IMF. People with knowledge of Pakistan’s backup strategy claimed that the government would attempt to speed up several government-to-government deals to earn money, including giving the United Arab Emirates (UAE) four port bert.
A $100,000 no-questions-asked overseas remittance amnesty that was proposed in the budget for the upcoming fiscal year is another measure on which the government is depending. However, the government might begin implementing this new amnesty on June 25 if no progress is made during the anticipated PM-MD conference in Paris. According to the sources, in that situation, a person can whiten $200,000 in 370 days by first using this option before June 30th and then again in July as part of the next fiscal year’s restriction.
The Gulf nations may be able to advance financing for a few corporate farming projects in which they are interested if the military’s notion of the Special Investment Facilitation Council (SIFC) becomes successful, according to the sources. Even if these nations expressed interest in collaborative ventures months ago, the initiative is still in its early stages.According to the finance ministry, “the finance minister also informed the envoy about the progress on the ongoing talks with the IMF and stated that the government is committed to completing the programme.”
According to reports, Dar informed the US ambassador that China has significantly aided Pakistan by refinancing $1.3 billion in international commercial loans in advance. However, despite all the challenging steps Pakistan has taken since February of this year, the finance minister reportedly claimed in the meeting that the IMF was not cooperating.
The government increased fuel taxes, electricity and petrol rates, and imposed a mini-budget of Rs170 billion in February of this year. The IMF’s concerns regarding the foreign exchange market, however, were largely disregarded because it was unable to get $6 billion in loans.Dar updated Blome on the current account deficit’s improvement, which was under $3 billion for the first 11 months of the current fiscal year. The nation’s current account surplus in May marked the third straight month that it occurred, which helped to keep the official foreign exchange reserves at their present level. Dar notified the US ambassador of the budget’s fiscal restructuring, which revealed a 379 billion rupee primary budget surplus.
According to the finance ministry, the budgetary measures the government is taking to close the fiscal gap so it can meet its obligations on a national and international level were also discussed with the US ambassador. In order to face the difficult economic environment and put the economy on the path to stability and growth, he also discussed the government’s economic priorities and policies.
Dar and Andrew Mitchell met virtually the day before in the Foreign, Commonwealth & Development Office (FCDO) of the United Kingdom. Mitchell encouraged the finance minister to make up for the IMF’s lack of trust. According to an official handout from the finance ministry, Dar reminded the US ambassador that Pakistan valued the strong, long-standing, and mutually beneficial bilateral economic and commercial relations with the US.
According to the statement, the two sides also discussed how to further improve the already-existing bilateral ties between the two nations as well as topics of mutual interest. According to the finance ministry, the US ambassador expressed confidence in the government’s plans and programmes for economic sustainability and socioeconomic improvement of the general public. He offered his assistance in fostering bilateral trade, investment, and economic ties between the two nations, it was noted.
