Denigrating Pakistan’s economic managers: IMF refuses to confirm or deny ‘liars’ label
Finance ministry officials admit tensions, tougher conditions for loan.
ISLAMABAD:
The International Monetary Fund has refused to confirm or deny whether they ever referred to Pakistan’s economic managers as “liars” in their internal discussions in 2008 when they were deciding on whether to approve an $11.3 billion bailout package for Islamabad.
“The IMF has a cordial and constructive dialogue with the government and central bank of Pakistan,” said a spokesperson for the Washington-based internal lender, in response to a written question about the state of relations between Islamabad and the IMF in light of recent revelations that suggest that IMF officials had a very low opinion of Pakistan’s ability to keep its promises on fiscal reform.
Dr Ehtisham Ahmad, Pakistan’s former representative in the IMF Board said on Monday that the IMF considered Pakistan economic managers cheats and liars who made false promises on tax reforms, particularly with regard to implementing a commitment on levying the value added tax.
Ahmad suggested that, due to Pakistan’s lack of credibility, the IMF would not extend a new loan programme without implementation of prior actions. Islamabad is seeking a second IMF loan to pay off the first one, whose repayments begin in 2012.
Ahmad had also alleged that the IMF only agreed to lend money to Pakistan in the first place after strong pressure from the United States, particularly the White House. The IMF has not denied this allegation.
“The November 2008 stand-by arrangement was decided in light of increased balance of payments risks for Pakistan,” said the IMF’s official spokesperson.
He said that decisions regarding lending requests are approved by the IMF’s 24-member executive board which is responsible for conducting the day-to-day business of the IMF. The directors are appointed by member countries and the IMF’s Managing Director, a position currently held by France’s Dominique Strauss-Kahn.
Finance Minister Abdul Hafeez Sheikh, however, said that Ahmad had contacted him to disown the statements attributed to him in public. Nonetheless, the minister added “Pakistan is a free country and anyone can speak their mind.”
The statements by Dr Ehtisham Ahmad, however, were made at a seminar attended by over 60 people, including renowned economists, government officials and journalists.
Finance ministry officials admitted that relations between the IMF and Pakistan were strained in their negotiations revolving around the current and potential future loan programme. According to official familiar with the negotiations, the IMF is unlikely to release the next loan tranche without the implementation of prior commitments.
An IMF staff level mission is arriving in the first week of May to hold talks for the fifth review of Pakistan’s economy. They would set budget deliverables and again would come back in July to review progress on implementation.
Published in The Express Tribune, April 29th, 2011.
The International Monetary Fund has refused to confirm or deny whether they ever referred to Pakistan’s economic managers as “liars” in their internal discussions in 2008 when they were deciding on whether to approve an $11.3 billion bailout package for Islamabad.
“The IMF has a cordial and constructive dialogue with the government and central bank of Pakistan,” said a spokesperson for the Washington-based internal lender, in response to a written question about the state of relations between Islamabad and the IMF in light of recent revelations that suggest that IMF officials had a very low opinion of Pakistan’s ability to keep its promises on fiscal reform.
Dr Ehtisham Ahmad, Pakistan’s former representative in the IMF Board said on Monday that the IMF considered Pakistan economic managers cheats and liars who made false promises on tax reforms, particularly with regard to implementing a commitment on levying the value added tax.
Ahmad suggested that, due to Pakistan’s lack of credibility, the IMF would not extend a new loan programme without implementation of prior actions. Islamabad is seeking a second IMF loan to pay off the first one, whose repayments begin in 2012.
Ahmad had also alleged that the IMF only agreed to lend money to Pakistan in the first place after strong pressure from the United States, particularly the White House. The IMF has not denied this allegation.
“The November 2008 stand-by arrangement was decided in light of increased balance of payments risks for Pakistan,” said the IMF’s official spokesperson.
He said that decisions regarding lending requests are approved by the IMF’s 24-member executive board which is responsible for conducting the day-to-day business of the IMF. The directors are appointed by member countries and the IMF’s Managing Director, a position currently held by France’s Dominique Strauss-Kahn.
Finance Minister Abdul Hafeez Sheikh, however, said that Ahmad had contacted him to disown the statements attributed to him in public. Nonetheless, the minister added “Pakistan is a free country and anyone can speak their mind.”
The statements by Dr Ehtisham Ahmad, however, were made at a seminar attended by over 60 people, including renowned economists, government officials and journalists.
Finance ministry officials admitted that relations between the IMF and Pakistan were strained in their negotiations revolving around the current and potential future loan programme. According to official familiar with the negotiations, the IMF is unlikely to release the next loan tranche without the implementation of prior commitments.
An IMF staff level mission is arriving in the first week of May to hold talks for the fifth review of Pakistan’s economy. They would set budget deliverables and again would come back in July to review progress on implementation.
Published in The Express Tribune, April 29th, 2011.