In Imran Khan's letter, IMF asked to focus on 'political stability' in new bailout talks

• IMF has yet to receive the letter, says lender.
• IMF declined to comment on country's political situation.
• "The IMF will do its own due diligence," says Topline securities.

The Pakistan Tehreek-e-Insaf (PTI), the party of jailed former prime minister Imran Khan, has asked the International Monetary Fund to factor in the country's political stability in any further bailout talks, two people familiar with the matter said on Wednesday.

The PTI has sent a letter to the IMF detailing its position, two senior sources in the party said, adding more details would be made public in due course.

The IMF has yet to receive the letter, the lender said in an email to Reuters.

Last week, the PTI founder Imran Khan decided to write a letter to the IMF urging it to call for an audit of the February 8 election before it continues talks with Islamabad.

“Imran Khan will issue a letter to the IMF today. The charter of IMF, EU, and other organizations stipulates that they can function or provide loans to a country only if there’s good governance,” the incarcerated PTI founder chairman’s counsel Barrister Ali Zafar told reporters at the Adiala Jail last Thursday.

He had said Imran will write a letter to the International Monetary Fund (IMF) today, in which the IMF will be asked to call upon the Government of Pakistan to conduct an audit of the rigged constituencies through an independent audit team.

Last week, the IMF declined to comment on the country's political situation after Imran's aides said they would urge the lender to call for an independent audit of Pakistan's disputed Feb 8 elections before engaging in further talks with Islamabad.

Sohail Ahmed of Karachi-based Topline securities said the letter was unlikely to have a major market impact.

"The IMF will do its own due diligence," he said.

'Widespread intervention, fraud'

Later in the day, the PTI released a letter addressed to IMF Managing Director Kristalina Georgieva.

In the letter, available with Geo News, PTI spokesperson Raoof Hasan said February 8 general elections were subjected to "widespread intervention and fraud in the counting of votes and compilation of results". 

"In view of the policies and principles the IMF stands for, there should be no doubt that the abuse of power by a small number of holders of public office to impose their likes and dislikes on Pakistan’s populace as aforesaid, and thus to ensure their continuing personal gain, would not be promoted or upheld by the IMF," Imran-led party alleged. 

Moreover, it said not just the PTI, but several other political parties in Pakistan, along with several western governments, Commonwealth observers, local civil society organisations, and international print and electronic media, have called for an independent probe into claims of intervention and electoral fraud. 

"We, therefore, call upon the IMF to give effect to the guidelines adopted by it with respect to good governance as well as conditionalities that must be satisfied prior to the grant of a finance facility that is to burden the people of Pakistan with further debt. An audit of at least thirty percent of the national and provincial assemblies’ seats should be ensured, which can be accomplished in merely two weeks," the letter added.

There are at least two indigenous organisations in Pakistan namely the Free and Fair Election Network (Fafen) and PATTAN-Coalition38 that have proposed comprehensive methodologies to conduct an audit of the elections which, with some modifications, could be implemented locally to the satisfaction of all stakeholders, read the letter.

"Such a role by the IMF would be a great service to Pakistan and its people, and could become the harbinger of enduring prosperity, growth, and macroeconomic stability in the country."

Pakistan's cash-strapped economy is struggling to stabilise after securing a $3 billion standby arrangement from the IMF last summer, with record inflation, rupee devaluation and shrinking foreign reserves.

China has rolled over a $2 billion loan to Pakistan, according to Ministry of Finance sources.

The $2 billion loan was due in March and has been extended for one year, it said.

Analysts say a new government — which PTI's opponents are expected to form — is likely to need more funds from the global lender after the standby arrangement expires in April.

Imran, ousted in April 2022 in a parliament vote of confidence, was accused by opposition parties of scuttling an IMF deal under a $6 billion Extended Fund Facility days before leaving his office, a charge he denies.

An IMF spokesperson said last week that it was focused on the completion of the standby programme but was available to support the post-election government through a new arrangement to address Pakistan's ongoing challenges if requested.

— With additional input from Reuters