File photo of Finance Minister Ishaq Dar. Photo courtesy PID
The ousted Pakistan Tehreek-e-Insaf (PTI) government’s actions eroded Pakistan’s credibility with the International Monetary Fund (IMF), resulting in it seeking more information than necessary for the release of the next tranche of a $7 billion bailout, Finance Minister Ishaq Dar claimed on Tuesday.
In an interview with Samaa TV anchor Nadeem Malik, the Pakistan Muslim League (Nawaz) leader said the global lender traditionally only sought information about the current quarter but had asked Islamabad to provide data for the entire fiscal year, delaying a pending review for the release of the next tranche. Stressing that Pakistan was providing all necessary information, he lamented that the IMF was also seeking information on funding needs that were still being worked out.
“They’re basically asking [our financing plan for flood rehabilitation] and we are also preparing it,” he said, adding that this was “unfair” as Islamabad was still working it out. However, he maintained, a “realistic picture” would be provided to the global lender. Describing as “logical” the IMF’s examination of the overall direction of a particular quarter, including structural reforms and fulfilment of conditions, he said the IMF might combine the 9th and 10th reviews due to the upcoming holidays.
To a question on whether the reviews would be completed by January, Dar said the government was preparing for this and wanted to “complete this task” in the next few days.
There has been a surge in speculation over Pakistan’s default risk in light of persistently declining foreign reserves, with economists warning that the country is barreling toward an economic crisis if it cannot secure the next IMF tranche and additional financial support from allied nations. The finance minister, however, has maintained default is not on the cards, but admitted the situation is “challenging.”
Early elections
Discussing his recent meetings with President Arif Alvi—which are believed to serve as ice-breakers for eventual talks between the government and the PTI—Dar said the president had suggested holding direct talks between the PTI leadership and the ruling coalition government led by the PMLN. However, he said, Alvi has been informed that the government would not hold talks on conditions.
Claiming that he was not inclined to facilitate the PTI’s return to Parliament, he reiterated that Pakistan’s situation did not allow for early elections, which would be held as per schedule.
The finance minister also discussed the appointment of the new Army chief and came to the defense of Gen. (retd.) Qamar Javed Bajwa, saying he had not directed the PMLQ to join the PTI during the vote of no-confidence. Admitting that PMLN leader Nawaz Sharif had approved the name of Gen. Asim Munir after he was nominated by Prime Minister Shehbaz Sharif, he hoped the new Chief of Army Staff would work for the “betterment of his institution and the system overall.”
He said the government had prepared a ‘Plan B’ in case President Alvi rejected the summary sent by the Prime Minister’s Office, adding that ‘Plan A’ had called for retention of the names mentioned in the summary, while ‘Plan B’ was to promote the senior-most officer and appoint him as the vice-chief of Army staff until the retirement of Bajwa.
On the PMLN’s ties with Punjab Chief Minister Parvez Elahi—who pledged to support the vote of no-confidence before flipping to the PTI in April—Dar said he had been “shocked” by the PMLQ’s about-face and would not play any role in trying to curry his favor for the ruling coalition. “Initially, Nawaz Sharif wasn’t ready to accept Parvez Elahi. I made Nawaz agree on Elahi [for chief minister],” he said, adding that the PMLQ leader and his son, Moonis, were mistaken in claiming that the former Army chief had told them to side with the PTI.
“Parvez Elahi told Gen (retd.) Bajwa that he had been advised to join PTI’s side. In response, Gen. (retd.) Bajwa said that he should do whatever he pleased,” he said, adding that according to his knowledge, Elahi had received a call from WAPDA House to join the PTI. While Dar did not name anyone, this was likely a reference to former WAPDA chairman Lt. Gen. (retd.) Muzamil, who has been rumored to be a PTI sympathizer.
Financial support
According to the finance minister, Pakistan is trying to shore up its economy with financial help from Saudi Arabia. He said this would include doubling the current deferred oil payment facility given by Riyadh to $2.4 billion per year. “I have discussed both things [financial help and oil facilities] with the Saudi finance minister, and there are positive vibes from there,” he said. “They said they would support us,” he added, without giving any time frame for this support.
To a question on buying discounted oil from Russia, Dar said U.S. officials had told him that a G7 pricing committee was being set up for Russian products that would set a price cap. “[They said] you shouldn’t buy [oil] above that, and I agreed,” he said.