Pakistan’s time being wasted, says Dar in reference to delay in IMF funding

Finance Minister Ishaq Dar said on Thursday that global institutions want Pakistan to default like Sri Lanka and then enter negotiations.

In an apparent reference to the delay in funding from the International Monetary Fund (IMF), he stated that “Pakistan’s time is being wasted”.

Moody’s says chances of Pakistan securing IMF bailout dwindling: report

“We are a victim of geopolitics. IMF has never dealt this way in past 30 years,” he said while speaking to reporters in Islamabad. “Few institutions want Pakistan to become Sri Lanka and then begin negotiations.”

However, he added that “Pakistan will receive good news by June 30”.

He added that Pakistan met every condition of IMF including securing external financing and sharing budget 2023-24 details.

“Other conditions were completed as well,” he said. “I do not understand what IMF wants and why it is not proceeding with staff level agreement.”

“Pakistan is a sovereign country and we cannot agree to every condition of IMF,” he said. “As an independent country, we should be allowed to freely address tax matters.”

He also added that Pakistan will not go to Paris Club for rescheduling of loans.

Speaking about the amendments undertaken by the previous government to appease IMF, he added that State Bank Amendment Act 2021 was intolerable.

Dar updates Chinese envoy on talks with IMF, budget

“State Bank of Pakistan (SBP) is Pakistan’s property and not any global institution’s,” he stressed.

Dar’s agitated response comes after the IMF expressed dissatisfaction with the budget proposals for fiscal year 2023-24, calling them a missed opportunity to broaden the tax base while criticising the new amnesty scheme that “creates a damaging precedent”.

“The draft FY24 Budget misses an opportunity to broaden the tax base in a more progressive way,” Esther Perez Ruiz, the IMF Resident Representative for Pakistan, told Business Recorder earlier on Thursday.

“The long list of new tax expenditures reduces further the fairness of the tax system and undercuts the resources needed for greater support for vulnerable (Benazir Income Support Programme) BISP recipients and development spending,” she added.

Perez Ruiz said the IMF remains engaged to discuss policies to maintain stability, and “it stands ready to work with the government in refining this budget ahead of its passage”.

Her statement comes as the IMF programme remains scheduled to end on June 30, a day before the new budget measures come into force with the start of the new fiscal year in Pakistan.

Moody’s Investor Services said on Thursday that Pakistan’s ability to secure loans from bilateral and multilateral partners will “be severely constrained” until a new programme is agreed with IMF.

In an issuer comment, Moody’s said whether Pakistan will join another IMF programme may only become clear after elections, which are due by October 2023. Finance Minister Ishaq Dar during a press conference last week already said it will be up to a new elected government to decide on entering another IMF programme.

“Negotiations for any future IMF programme would also take some time, even if they succeed. Until a new programme is agreed, Pakistan’s ability to secure loans from other bilateral and multilateral partners will be severely constrained,” it said.