[vc_row][vc_column][vc_column_text dp_text_size=”size-4″]On Wednesday, the US asked Pakistan about its backup plan in the event that the International Monetary Fund (IMF) programme ends next week without disbursing the third-to-last loan tranche of $1.2 billion.
According to finance ministry insiders, Donald Blome, the US Ambassador, raised the matter during a meeting with Finance Minister Ishaq Dar in the Q Block.
The “plan B,” as Pakistani authorities call it, is currently the most sought-after blueprint, as the four-year IMF scheme may suffer the same fate as the 21 prior unsuccessful programmes.
Blome’s query came after Dar informed the top US diplomat in Islamabad on the government’s efforts to resurrect the $6.5 billion rescue plan during the past several months.
The meeting took place on the same day that Prime Minister Shehbaz Sharif was scheduled to meet with IMF Managing Director Kristalina Georgieva on the sidelines of the Paris Climate Finance Summit. The Prime Minister arrived in Paris on Wednesday for a two-day tour.
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So far, the premier’s efforts to seek the assistance of the managing director have not yielded the intended outcomes, including an engagement with ambassadors from the West, Europe, and Asia this week. PM Sharif has spoken with Kristalina via phone in the last month and has sent three letters to her, outlining Pakistan’s attempts to restart the delayed programme.
According to sources, Dar did not provide many specifics regarding the backup plan, but did state that the country was surviving without the IMF.
According to people familiar with Pakistan’s backup plan, the authorities would try to forward some of the government-to-government transactions in order to obtain finances, including giving over four port berths to the United Arab Emirates (UAE).
The government is also counting on a $100,000 no-questions-asked overseas remittance amnesty proposed in the next fiscal year’s budget. However, if no progress is made during the upcoming PM-MD meeting in Paris, the government can apply this new amnesty beginning June 25th.
According to the sources, in that situation, a person can whiten $200,000 within 370 days, first by using this facility before June 30th and then again in July as part of the next fiscal year’s limit.
According to insiders, if the military’s notion of a Special Investment Facilitation Council (SIFC) is successful, the Gulf countries may be able to offer some monies in advance for a few corporate agricultural projects in which they are interested. This initiative, however, is still in its early stages, despite the fact that these countries expressed interest in collaborative partnerships several months ago.
“The finance minister also informed the envoy about the progress of the ongoing talks with the IMF and stated that the government is committed to completing the programme,” the finance ministry said.
Dar allegedly told the US envoy that China aided Pakistan significantly by pre-financing $1.3 billion in international commercial loans. Despite all of Pakistan’s severe actions since February of this year, the finance minister indicated in the meeting that the IMF was not cooperating, according to authorities.
In February of this year, the government imposed a Rs170 billion mini-budget, boosted electricity and petrol rates and increased fuel taxes. However, it was unable to secure $6 billion in loans, and the IMF’s warnings regarding the foreign exchange market were largely ignored.
Dar updated Blome on the progress made in reducing the current account deficit, which was less than $3 billion in the first 11 months of the current fiscal year. May was the country’s third consecutive month of current account surplus, which helped to keep official foreign exchange reserves at their current level.
Dar addressed the US ambassador on the fiscal consolidation he implemented in the budget, which resulted in a Rs379 billion primary budget surplus.
According to the finance ministry, the finance minister also informed the US ambassador about the government’s budgetary initiatives to close the fiscal gap and meet the country’s national and international financial responsibilities. He also discussed the government’s economic strategies and priorities for dealing with the adverse economic situation and putting the economy back on track for stability and growth, according to the statement.
Andrew Mitchell, Britain’s Minister of State in the Foreign, Commonwealth and Development Office (FCDO), had a virtual meeting with Dar the day before. Mitchell recommended the finance minister to address the IMF’s trust deficit.
According to an official handout from the finance ministry, Dar reminded the US ambassador that Pakistan appreciates its deep-rooted historic and sustainable bilateral economic and commercial connections with the US. The two sides also discussed areas of mutual interest and how to strengthen the two countries’ current bilateral relations, according to the statement.
According to the finance ministry, the US ambassador expressed trust in the government’s policies and initiatives for economic sustainability and socioeconomic upliftment of the public. He also expressed his willingness to help improve bilateral economic, investment, and commercial links between the two countries.
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