ISLAMABAD: As Pakistan weighs options on how to seek financial support from external sources, the International Monetary Fund (IMF) has not yet endorsed Islamabad’s nominee for the post of senior adviser to the IMF executive director.
IMF Board Executive Director Jafar Mojarrad has so far withheld approval of the nomination of Zafar Hasan, said sources in the Ministry of Finance.
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Pakistan had forwarded the name of Hasan in May this year. Hasan is currently serving as additional secretary external finance in the Ministry of Finance.
The IMF has delayed the appointment of the senior adviser at a time when Pakistan may have to return to the lender for another bailout package. The country’s external-sector situation is precarious and the mood in Washington is hostile against Pakistan.
In order to deal with the situation, the upcoming Pakistan Tehreek-e-Insaf (PTI) government is also planning to hold the Overseas Investment Conference in London in October this year to review prospects of floating Diaspora bonds in a bid to raise funds, according to sources.
The post of senior adviser has remained vacant for the last one and a half year. Initially, former finance minister Ishaq Dar did not fill the post as he wanted to place one of his favourites. Later, ex-premier Shahid Khaqan Abbasi started the process of appointing the senior adviser very late.
Sources said after his bad experience with Pakistan’s two former senior advisers, Mojarrad wanted an experienced hand this time. The senior adviser assists the IMF executive director, who represents seven countries at the IMF Executive Board.
However, in the past, the Pakistan Administrative Service (PAS) group officers had failed to meet professional requirements of the post, which compromised Pakistan’s standing at the IMF.
Former finance secretary Shahid Mehmood was Pakistan’s last representative at the IMF. Mehmood, also from the PAS group, has again been sent to another prized position of executive director at the Asian Development Bank (ADB) in Manila.
Hasan has been nominated on merit and his professional and educational credentials are very strong, said former finance minister Dr Miftah Ismail who had approved his summary. The IMF should not hesitate to accept Pakistan’s nominee, he said.
Ismail said unlike the past, when the country’s representatives were near their superannuation age, Hasan would have sufficient time left to serve Pakistan after being appointed on the challenging IMF post.
Sources said Mojarrad wanted Pakistan to nominate Asad Qureshi as senior adviser. Qureshi is currently working with the IMF in Washington and has also served in the State Bank of Pakistan.
Mojarrad is said to have recommended the name of Qureshi to avoid the hassle faced earlier due to lack of expertise of Pakistan’s last nominee to the IMF, sources said.
However, the then finance minister wanted to avail Pakistan’s quota by sending Hasan since Qureshi was already working with the IMF. Over a period of time, Pakistan’s representation at international financial institutions has been on the decline due to multiple reasons.
Currently, there are hardly three to four Pakistanis working in the IMF at mid- and senior-level positions.
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The external-sector situation remains precarious and the official foreign currency reserves are depleting rapidly. As of August 10, Pakistan’s gross official reserves stood at $10.15 billion despite a $2-billion one-off injection by China. The reserves are hardly enough to provide cover for two months of imports.
The mood in Washington is also becoming hostile due to Pakistan’s close relationship with China. In the last 10 days, the US Congress and the US secretary of state have publicly expressed reservations about the IMF package for Pakistan.
In a letter addressed to US Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo, 16 US senators have asked how the Trump administration plans to address “the dangers of China’s Belt and Road Initiative (BRI)”.
The letter asked Mnuchin and Pompeo how they “plan to raise the dangers of Chinese infrastructure financing through BRI with the IMF”.
Sources said under such circumstances, Pakistan needed its representative in the IMF to convince IMF board members about the need for the bailout programme. The country has not yet made a formal decision to seek the bailout.
But even then, it will have to clear the air by addressing concerns of member countries about its economic relations with China.
Published in The Express Tribune, August 17th, 2018.
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