No bar in Pakistan loan programme that interferes with elections: IMF
March 24, 2023 10:08 AM
The International Monetary Fund (IMF) has made it clear that decisions regarding the constitutionality, feasibility and timing of provincial and general elections “rest solely with Pakistan’s institutions”, clarifying that there was “no requirement under Pakistan’s Extended Fund Facility-supported programme which could interfere with the country’s ability to undertake constitutional activities”, reported 24NewsHD TV channel on Friday.
The statement from the international monetary lender came a day after the Election Commission of Pakistan (ECP) decided to put off Punjab Assembly elections by more than five months, citing financial and security constraints.
However, in a statement on Thursday, IMF Resident Representative for Pakistan Esther Perez Ruiz reportedly said: “Targets under IMF-supported programmes are set at the aggregate general government level (aggregating across federal and provincial government), and within these there is fiscal space to allocate or reprioritise spending and/or raise additional revenues to ensure constitutional activities can take place as required.”
A few days ago the IMF had said that Pakistan has made “substantial progress” toward meeting policy commitments needed to unlock billions of dollars in loans the country needs to avoid a default but “few remaining points are yet to be finalized”.
Pakistan has taken tough measures including increasing taxes and energy prices, and allowing its currency to weaken to restart a $6.5 billion IMF loan package. The funds will offer some relief to a country still reeling from last year’s devastating floods and help pull the economy out of a crisis ahead of elections this year.
“A staff-level agreement will follow once the few remaining points are closed,” said Esther Perez Ruiz, the IMF’s resident representative for Pakistan, adding “Ensuring there is sufficient financing to support the authorities in the implementation of their policy agenda is the paramount priority.”
Finance Minister Ishaq Dar had said last week that the IMF wanted to see countries finalize commitments they’ve made to help Pakistan shore up its funds before signing off on the bailout package. Pakistan needs to repay about $3 billion of debt by June, while $4 billion is expected to be rolled over.
In the statement, Ruiz had said the lender wasn’t consulted on the government’s plan to raise fuel prices for wealthier motorists to finance a subsidy for lower-income people. “Fund staff are seeking greater details on the scheme in terms of its operation, cost, targeting, protections against fraud and abuse, and offsetting measures, and will carefully discuss these elements with the authorities,” she said.
EFF is a financial arrangement between the IMF and a member country, providing economic support and policy guidance over an extended period. The ninth EFF review for Pakistan is of particular significance as it will determine the release of the next tranche of funding.
Reporter Waqas Azeem