Amid worsening economic crisis, Pakistan seeks US help to soften IMF terms

• Ishaq Dar discusses economic challenges with US officials.
• Pakistan requests US to use its influence over IMF.
• Pak-IMF differences persist over approach to dealing with exchange rate.

ISLAMABAD: Pakistan on Wednesday turned to US authorities asking them to use their diplomatic influence for convincing the International Monetary Fund (IMF) to soften loan conditions as the country is passing through a critical phase both economically and politically.

This request was made by Federal Finance Minister Ishaq Dar in his meeting with the visiting Deputy Assistant Secretary of the US Department of the Treasury for Asia, Robert Kaproth, at the Finance Division on Wednesday.

The loan programme is stalled since months and the Shehbaz Sharif government is finding it hard to implement the lender’s conditions amid a tense political environment in the country with elections due in months.

The government is in a fix as imposing more taxes on the already-burdened citizenry will put the ruling alliance in a more difficult situation with inflation at all-time high and fast-depleting forex reserves.

The friendly countries have also told Islamabad that the revival of the IMF loan facility will unlock other sources of financial help badly needed for economic stability.

An official announcement here said that Senior Macroeconomist for the Department of Treasury for Pakistan Eva Ghirmai, Financial attache’ Larita Bolden, Minister of State for Finance and Revenue Dr Aisha Ghous Pasha, SAPM on Finance Tariq Bajwa, secretary of finance and senior officers from Finance Division attended the meeting.

Finance Minister Ishaq Dar welcomed Robert Kaproth, and briefed him on the economic outlook of the country.

He apprised him that the government inherited a weak economic legacy and, despite challenging economic conditions, is focusing on fixing things in the right direction by introducing reforms in all sectors including the energy sector and capital market to achieve economic growth and development.

He said that due to pragmatic measures taken by the government, the country is destined for progress and development.

The finance minister also apprised him of the economic priorities of the government including putting the economy on the right path while fulfilling its international obligations.

Dar also shared with Robert Kaproth the damages caused by the floods in Pakistan and their impact on the economy of Pakistan. He stressed that the government is handling all challenges with complete commitment.

In response, Kaproth underscored good relations between Pakistan and the US and expressed confidence in the policies and programmes of the government for economic and financial stability.

Pakistan-IMF talks

Meanwhile, the sources said that Pakistan and the IMF continued exchanging data this week, but the Fund has not shown any lenient attitude or relaxed its tough conditions so far.

One of the bones of contention is persistent differences over the approach to dealing with the exchange rate as the IMF considers it completely unacceptable for maintaining an artificially stable exchange rate.

Though PM Shehbaz Sharif had publicly announced that the government was ready to implement all IMF conditions for reviving the Fund programme, the government was finding it politically hard for implementing the tough conditions.

When contacted, a senior official of the Finance Division said the talks continued in a positive way.