Umar-Mnuchin meeting fails to materialize at IMF moot

Finance Ministry had sought meetings with Mnuchin, Lagarde

ISLAMABAD: US Treasury Secretary Steven Mnuchin did not meet with the Pakistani delegation on the sidelines of the spring meetings of the International Monetary Fund (IMF), indicating a lack of warmth in ties between the once close allies.

The finance ministry had sought formal meetings with Mnuchin and IMF Managing Director Christine Lagarde on the sidelines of the IMF-WB spring meetings, sources in the ministry told The Express Tribune.

The Pakistani delegation comprised Finance Minister Asad Umar, State Bank of Pakistan Governor Tariq Bajwa, Finance Secretary Younus Dagha and Economic Affairs Division Secretary Noor Ahmad.

Finance ministry sources said the motive for seeking the finance minister’s meeting with his U.S. counterpart Mnuchin was to explain Pakistan’s case to him.

The US holds sway over IMF management and the Financial Action Task Force – the two global institutions with whom Pakistan is engaged to keep its economy and global standing on the ‘right track’.

During his five-day visit to the US, Asad Umar did meet with relevant IMF officials but a formal meeting with the IMF head did not take place. When contacted, Umar was of the view that there was no need for a meeting with Lagarde as they had met thrice in the past few months.

He said, however, that fruitful discussions had taken place with IMF Deputy Managing Director David Lipton. Umar reacted to a question on his meeting with Mnuchin, saying “It is a trash story that will create negativity”.

Since September last year, Pakistan is engaged with the IMF for securing a bailout package without which, the finance minister believes, Pakistan’s rupee would nosedive and foreign investment would dry up.

The US treasury department’s reluctance to meet with the Pakistani delegation suggests that both countries still have serious issues, although Islamabad has been cooperating with Washington to broker a deal in Afghanistan.

In the past, Pakistani finance ministers either used to meet with the U.S. secretary of the treasury or at least with the treasury deputy secretary. The Express Tribune on Friday requested the US Treasury for a version through US Embassy spokesman Richard Snelsire.

“We have no information on individual meetings,” said the spokesman. The IMF’s Resident Representative in Islamabad, Teresa Daban, who also went to Washington, did not respond to the queries on Umar’s meeting with Lagarde.

But during his visit, Asad Umar met with U.S. Assistant Treasury Secretary Marshall Billingslea. A handout issued by the Ministry of Finance after the meeting stated that “on the sidelines, the finance minister also met with the US Treasury”. It did not mention the names of the US Treasury officials.

The level of the U.S. Assistant Treasury Secretary is equal to a Pakistani Joint Secretary of Finance. In the hierarchy, a U.S. secretary (equivalent to a Pakistani federal minister) is followed by the deputy secretary, the undersecretary and the assistant secretary.

Umar said the US assistant secretary of treasury is co-chair of the FATF and the purpose of the meeting was to raise with him the issue of Indian presence at the FATF. There has been opposition to Pakistan’s bid to seek a bailout package from the IMF by the US Congress.

In the past six months, US Congress members have twice written letters to the secretary of state and secretary of treasury opposing a possible deal. The US secretary of state and secretary of defence have also aired their reservations about an IMF deal due to Pakistan’s warm relations with China.

The IMF’s conditions for signing the deal with Pakistan include sharing details of Chinese loans, increasing the power tariff, adjustments in the exchange rate and fiscal policies and imposition of taxes. These have been the sticking points since November last year, said government sources.

In addition to his meeting with David Lipton, Umar also met separately with Jafar Mojarrad, Executive Director of the IMF and Jihad Azour, Director of the Middle East and Central Asia Department of the IMF.

There were expectations that the dates for the IMF staff level visit could be finalised during a meeting with Azour, the sources said. But Pakistani authorities expect that a deal with the IMF would be signed soon and an IMF staff level visit could take place in the next couple of months.