Finance Minister Ishaq Dar vowed on Thursday that he and his team were “absolutely committed” to completing the current $7bn Extended Fund Facility programme with the International Monetary Fund (IMF), once again stressing that Pakistan was close to signing the staff-level agreement.
The country only has sufficient reserves to cover three weeks’ worth of crucial imports, and the government has until November to undertake the measures necessary to achieve an agreement with the IMF.
Dar stated: “I and my team have resolved that, in a short amount of time, we will implement and we will discharge all the sovereign commitments that the previous government had made.” Dar was speaking at a seminar hosted by the Finance Ministry in Islamabad today.
He recalled that the coalition government was handed over an economy that was “in a shambles”.
“To top it [off], the previous government had consented to an IMF-extended lending facility. However, before leaving office, they changed several of the conditions rather than upholding their promises. This resulted in a significant lack of trust [between the lender and Pakistan],” he emphasized.
Nonetheless, the minister continued, the government has opted to uphold the agreements after realizing that these duties were made by Pakistan’s sovereign state and not by an individual.
The staff-level agreement appears to be close to being signed, hopefully, within the next two days, Dar continued. “We have been in the process of the 9th review which has taken longer than it should have,” he said.
The conclusion of the ninth review of a $7 billion loan programme, which has been postponed since late last year due to a policy framework, would result in the payout of $1.2 billion as well as the opening of inflows from friendly countries.
The lender’s requirements are designed to make sure Pakistan reduces its fiscal deficit before submitting its annual budget in June.
The majority of the other earlier steps, such as increasing the cost of fuel and energy, ending subsidies in the export and power industries, and raising extra money through new taxes in a supplemental budget, have already been taken by Pakistan.