The ongoing talks between Pakistan and the International Monetary Fund (IMF) have failed, meaning that the country would no more get any money from the world’s top lender as the current programme expires on the 30th of this month.
Although the finance ministry tried to convince the IMF by explaining Pakistan’s position on different reservations and conditions, the process led by Finance Minister Ishaq failed to produce the desired results.
The news will certainly further fuel the speculations that Pakistan would default in the coming months as many experts and global institutions have already been warning about the possibility. However, the government thinks otherwise and there are reports of “Plan B” already being activated amid the likely scenario of failing to get the IMF deal don.
Earlier, it was reported that Pakistan was not on agenda of the scheduled IMF Executive Board meetings this month, which start from June 20 (Tuesday) to June 29 with a gap on weekend. But there was still a remote possibility of including Pakistan on agenda if the ninth review is completed successfully.
It is the steady addition of new conditions and the latest reservations expressed on the next year’s budget that have delayed the approval since Nov 2022 despite regular contacts between two sides.
The country has been awaiting the IMF’s final approval of the pending 9th review under the Extended Fund Facility (EFF) programme which will expire on June 30 without the disbursal of the remaining $2.6 billion out of a total of $6.5 billion. Hence, there hasn’t been any possibility of making any progress on the 10th review.
Among other things, Pakistan has been accused of controlling the rupee exchange rate artificially and not reversing subsidies – the two issues about which Finance Minister Ishaq Dar is very much clear.
Dar has been of the opinion that the depreciation of rupee is the main reason behind Pakistan’s economic woes and this stance is nothing new as he has always been a staunch advocate of strong currency.
On the issue of subsidies, not only Dar but also the entire PML-N leadership – barring a few exceptions like Miftah Ismail and Shahid Khaqan Abbasi – thinks that they can further burden the people who are already hit hard by unprecedentedly high inflation due to currency depreciation and jacked up interest rate – the two policies dictated by the IMF.
Source : Dunya News