Saul Loeb—AFP
Prime Minister Shehbaz Sharif on Monday said he is trying to persuade the International Monetary Fund (IMF) to give Pakistan some “breathing space” in enacting economic reforms while it deals with the “nightmarish” situation arising from last year’s unprecedented floods.
The IMF has yet to conduct its 9th review of Pakistan’s ongoing Extended Fund Facility, with observers warning that further delays risk steering the country toward default amidst declining foreign exchange reserves and rampant inflation. However, the global lender has maintained that it will not revive the program until Islamabad ends all remaining subsidies on petroleum products and electricity, which the government maintains are necessary to avoid any further burden on the masses.
“Even before these floods hit Pakistan, we were already facing humongous challenges,” Sharif told journalists in Geneva after speaking at a donors’ conference where various donors pledged over $10 billion for Pakistan’s flood reconstruction plans. “Yet we had to again connect with the IMF and resurrect an agreement which was violated by the previous government—and accept even harsher conditionalities,” he said, adding that even though Pakistan was complying with the IMF’s conditions “as best as possible,” it was not reasonable to expect additional burdens to be placed on the country’s poorest.
“We are committed to IMF’s program,” he said. “We will do everything to comply with the terms and conditions. Though I am constantly trying to persuade them: please give us a pause,” he said, adding that he had spoken with IMF Managing Director Kristalina Georgieva last week and asked her to “kindly be considerate and compassionate and give us some breathing space.” Stressing that this was an ongoing dialogue, he said he was “sure” that the government would be able to convince the lender of Pakistan’s concerns “through logic and facts.”
Continuing on the government’s attempts to get relief, Finance Minister Ishaq Dar met with World Bank Vice President Martin Raiser on the sidelines of the conference, as well as IMF Mission Chief to Pakistan Nathan Porter, Islamic Development Bank President Muhammad Al-Jasser, and USAID Deputy Administrator Isobel Coleman.
According to a statement by the Finance Minister, Dar appreciated the financial and technical support extended by the World Bank to cope with the challenge posed by the floods. In his meeting with the IMF, he discussed challenges to regional economies in the wake of climate change and reiterated the commitment to complete the Fund’s program. “It was a good meeting but I do not have any statements to make,” Athanasios Arvanitis, deputy director of the IMF’s Middle East and Central Asia Department, told the Reuters news agency immediately after the meeting ended.