Govt’s lack of vision stalled IMF loan tranche: Tarin

Former federal minister for finance Shaukat Tarin has blamed the government’s lack of vision for the delay in scheduling formal talks on the overdue ninth review of a $7 billion International Monetary Fund (IMF) loan programme.

Pakistan entered a $6 billion IMF programme in 2019, which was increased to $7 billion last year. Its ninth review is currently pending with remote talks being held between the IMF officials and the government for the release of $1.12 billion tranche.

The 9th IMF review to clear the release of the next tranche of funds for Pakistan has been pending since September, as the country faces a severe economic crisis with its central bank’s foreign exchange reserves falling to a critical level of below $5 billion, which is barely enough for three months of imports.

Finance Minister Ishaq Dar has been blamed for “managing” the rupee-dollar parity, which is one of the key conditions set by the IMF for resuming stalled talks for the release of the tranche.

While welcoming the world community’s generous response at the recently held donors’ conference in Geneva where pledges for flood recovery exceeded $8 billion at a news conference at the Karachi Press Club, the former finance minister said the proportion of loan in the total commitments was a cause for concern.

“There is a concern that donors and lending countries may make the loan and aid payments conditional to the revival of the IMF programme.”

Tarin said that the top economic analyst claimed incompetence on technical grounds.

He said that due to the non-fulfilment of required commitments to reduce the fiscal deficit to 4% of the GDP as well as the government expenditure, debt servicing, elimination of two exchange rates and controlling the increasing volume of revolving debt of the energy sector, the case with the IMF was delayed.

The foreign exchange reserves came down drastically while the government had to make payments. The government itself was unknowingly doing things that were ruining the country, he claimed.

He said that the government did not have enough money to clear the containers of onions and pulses. Due to the closure of import LCs and the non-availability of dollars, traders were protesting and staging sit-ins outside the State Bank. Confidence in the banking sector was also declining, he added.

“Exports and remittances are decreasing. Factories are heading towards closure. Inflation and price indices of sensitive essential commodities are increasing. The government should liaise with the provinces and hold meetings on a weekly basis in the style of the PTI government to control food and commodity prices.”

He said that the PTI's economic team had a solution to the ongoing crisis which could also consult with the current government.

He said that no politician dissolves his assemblies but Imran Khan was trying to dissolve the assemblies and conduct elections to get the country out of the economic crisis.

Tarin cited Economist Muzzammil Aslam’s statement saying: “Ishaq Dar's claims are groundless.”

He asked, “How will the government pay $5 billion in global debt in the next three months?"