IMF agreement to be signed once Riyadh, Abu Dhabi confirm financial support

• Finance minister promises diplomats of resolving issues with IMF soon.
• At least 46 days have passed since finance minister claimed of striking deal with IMF. 
• Bureaucrats not happy with govt's cross-fuel subsidy announcement.

ISLAMABAD: The staff level agreement (SLA) between Pakistan and the International Monetary Fund (IMF) will only be signed when the Kingdom of Saudi Arabia (KSA) and United Arab Emirates (UAE) confirm financial support, reported The News, citing sources.

“As soon as support confirmation from KSA and UAE are received by the IMF then the staff level agreement will be signed with the IMF,” sources told the publication.

The News also reported that Finance Minister Ishaq Dar had informed diplomats in Islamabad at an Iftar dinner on Sunday that the issues with the IMF will be settled soon.

Almost 46 days have passed since the IMF and Pakistan concluded review talks here in Islamabad on February 9 and the very next day Finance Minister Dar claimed that the virtual talks have begun and the staff-level agreement would be signed within a few days. However, it is yet to be secured after the passage of 46 days.

On the issue of cross-fuel subsidy, there have been dissenting views within the Finance Ministry because the timing of the announcement could not be endorsed at all. It remains to be seen how the ministry will satisfy the global lender on the subsidy.

The bureaucrats from the ministry have resisted the scheme tooth and nail but the government went public with it. The move was undertaken by the Prime Minister’s Office.

“We have made it clear that such schemes cannot be implemented in view of the IMF’s known opposition to subsidies. At this point, the revival of the IMF programme is imperative and such schemes would jeopardise the whole process,” officials who spoke on the condition of anonymity told the publication.

They added they did not know about any progress on the contentious cross-fuel subsidy issue at this point in time.

In case the IMF programme is revived then the question will arise as to how the next 10th and 11th reviews will be accomplished.

The 10th review was due on February 3 of this year.

While the 11th review would be due on May 3 and it is not yet known how both sides would proceed even after the revival of the programme.