IMF distrusts Pak's Finance Ministry over incompetence, credibility: Former Pak FM
2 min read . Updated: 12 Mar 2023, 03:21 PM IST
Premium- Pak's ability to secure the next instalment of the IMF bailout package will rely on its prompt actions to secure full financing for its balance of payments deficit during the 2022-23 fiscal year.
Former Finance Minister of Pakistan, Miftah Ismail on Friday stated that the Ministry of Finance in Pakistan is not trusted by the International Monetary Fund (IMF).
According to media reports, the PML-N leader analyzed the failed agreement with the IMF, which has plunged the cash-crunched nation into a severe crisis.
Ismail commented, "There is a significant lack of competence and credibility."
Pakistan is dependent on funding from the IMF to prevent defaulting on its international obligations and to boost its economy, which is valued at USD 350 billion.
Miftah Ismail commented on the delay in the IMF program, stating that the finance minister's promises to complete the review of the IMF programme in one week have been made repeatedly but with no action taken, leading to frustration and scepticism.
"The issue I think is that the Pakistani government has done all it could and now we needed the friendly foreign countries to fund us so that our external accounts are not in deficit and our external requirement is fulfilled," he said stressing that the real issue, according to him, was that the "IMF doesn't trust the finance ministry."
The lack of trust between Pakistan and the IMF has continued to expand due to the previous government's violation of the agreed-upon terms. Furthermore, investors are worried about Pakistan's capability to fulfil its international debt payments as the nation experiences a shortage of dollars.
Pakistan and the IMF have been holding virtual talks after the two sides held 10 days of intensive negotiations with an IMF delegation in Islamabad from January 31 to February 9, which failed to reach an agreement.
The delay in obtaining funds from the IMF has put pressure on the government to address shortages and high prices, as well as to bolster foreign reserves.
Pakistan has implemented a series of measures to secure support from the IMF, including raising tax rates and energy prices. Additionally, the policy rate has been increased to 20%, marking the highest level in 25 years, as advised by the IMF.
Pakistan's ability to secure the next instalment of the IMF bailout package will rely on its prompt actions to secure full financing for its balance of payments deficit during the 2022-23 fiscal year.
It is imperative to obtain the necessary funds to address the pervasive shortages, alleviate the soaring prices, and reinforce the foreign reserves that are presently insufficient to cover even a month's worth of imports.