PTI supremo wants US-based lender to intervene: IMF refuses to comment on ‘Imran’s letter’

Mehtab Haider & Mumtaz Alvi & Azim Mian
Friday, Feb 23, 2024

ISLAMABAD/ NEW YORK: Looking forward to working with the new government, the International Monetary Fund (IMF) on Thursday declined to comment on PTI founder Imran Khan’s intended letter seeking intervention in Pakistan’s political scene.

Addressing a press briefing, IMF’s Director Communications Julie Kozack said that on January 11, the IMF brought total disbursements under the Standby Arrangement (SBA) to $1.9 billion, adding, “During the period of the caretaker government, the authorities have maintained economic stability.” She said, “We look forward to working with the new government on policies to ensure macroeconomic stability and prosperity for all of Pakistan’s citizens.”

When asked to comment on Imran Khan’s letter, she said, “I’m not going to comment on ongoing political developments.”

Earlier in the day, the PTI’s founding chairman Imran Khan decided to write a letter to the IMF urging it to call for an audit of February 8 election before it continues talks with Islamabad.

The country’s dwindling foreign exchange reserves may hit another low if the Fund takes the letter seriously and goes ahead with the election audit.

On the other hand, the IMF has sought further clarifications from the Government of Pakistan on the proposed restructuring plan of PIA and its unbundling to ascertain how the rescheduling of domestic debt of Rs268 billion would create fiscal implications and how the government would tackle them without hiking the fiscal deficit.

The IMF needs more clarity before sharing its formal response with the government, said the sources.

This crucial statement from the PTI has surfaced when the new government is going to be sworn in probably in the first week of March.

The government will have no option but to accomplish the existing $3 billion Standby Arrangement (SBA) program and then sign a fresh bailout package of 36 months with the request of augmentation of quota keeping in view a larger size to fill the gap of dollars.

“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.

He said the mandate of the people was stolen in the darkness of night, insisting that democracy could not run if the mandate of the people was stolen. He said the whole world had seen rigging taking place in the general elections.

He 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.

“We clearly ask the IMF that if talks are to be held, then first there should be audit in constituencies, where rigging was done and the audit should be independent and not through the ECP. The judiciary should be involved and if the apex court heads it, it will be very fine,” he argued.

Ali Zafar said if the elections were not transparent, no one will give loans to this country.

The upcoming government soon after taking the reins of power will have to furnish a formal request with Washington-based international lender to dispatch its review team to Islamabad to accomplish the second review which should be accomplished by March 15 so that the board’s approval could be sought for release of last tranche of $1.1 billion till April 12.

There’s no doubt that Pakistan will have to go back to the IMF for securing another medium-term Extended Fund Facility (EFF) with a request to augment the size of the program beyond the allocated quota keeping in the larger size of filling the needs of dollars.

“In the wake of increased political instability, it might make the work of upcoming economic team more difficult because the IMF might come up with more stringent conditions,” said an independent economist and added that there would be three major challenges for the incoming government coming into power over next few months. The first challenge would be striking staff-level agreement and securing the last tranche of $1.1 billion under the $3 billion SBA program.

The second challenge would be to strike a fresh IMF deal in a staggered manner for years and it would not be an easy task.

The third major challenge would be to get the budget 2024-25 sail through the parliament in line with the conditions agreed with the IMF.

Reacting to the PTI’s move, PMLN Deputy Secretary General Atta Tarar Thursday termed it a heinous attempt to “invite foreign interference” and “derail democracy”.

“They [PTI] want to derail democracy in the country [...] Legal action should be taken against their ulterior motives to dent national economy,” Tarar said in a statement.

The PMLN leader said the PTI wanted to see chaos in the country which won’t be allowed.

The next government will have to revive the national economy, and eliminate unemployment, he added.