The International Monetary Fund (IMF) does not want to enter into a long-term programme with Pakistan without a stable government, Pakistan-based newspaper, the Dawn said.
Citing people familiar with the developments, the news outlet said that bilateral donors, such as Saudi Arabia and the United Arab Emirates (UAE), are reluctant to help Pakistan, despite claims made by cabinet ministers of Pakistan Prime Minister Shehbaz Sharif.
The report said that the IMF is unwilling to accept the claim that Pakistan has the pledges to meet the $6 billion deficit it needs to fill.
The report by the Pakistani daily said that the government’s claims on the budget being in line with the expectations of the International Monetary Fund (IMF) could be misplaced, citing experts. The experts further pointed out that the budget unveiled last week makes it harder for Pakistan to complete the pending ninth and 10th reviews of the current bailout package, according to the report by the Dawn.
The Dawn cited Washington-based economist Uzair Younus and added that there are many in Washington who feel Younus could be right. The news outlet added that there are IMF and World Bank officials who also share the same sentiments but they are mum given the sensitivity of the issue.
A Pakistani official said that “economic stability is linked to political stability” and another official said that focus should lie on “long-term reforms” which will help Pakistan get more funds from the IMF in the future.
The officials also said that the Shehbaz Sharif-led Pakistan Democratic Movement-led (PDM) government will be in power for more 60 to 90 days following which an interim government will be set up and the IMF, if it chooses to enter into a programme with Pakistan, will require at least a year’s guarantee from the other side on implementation of reforms.
“How can a government that is there for 60 to 90 days give this guarantee?” the official speaking to the Dawn was quoted as saying.
The people mentioned above further added that the US is not offering any assistance to help speed up the process of disbursement of funds from the IMF.
The 53% higher expenditure in the budget is being seen as very large, the people mentioned above said, adding that the Pakistani economy is in a “state of shock”.
The Dawn, citing another former official, said that the current budget is “eye-wash before elections”. “They will bring a mini-budget soon after the elections,” the official was quoted as saying by the Dawn.
Another official pointed out that the IMF board has less than 20 days to meet and decide how and when to disburse the remaining funds to Pakistan.
“If I were the IMF mission chief for Pakistan, I would say this is over,” the official further added.