Dar pulls out of WB-IMF spring meetings

Cites deepening political uncertainty, developing judicial crisis in country as reasons

ISLAMABAD:

In a major development, Finance Minister Ishaq Dar has cancelled his visit to the United States where he was scheduled to meet the International Monetary Fund management for the removal of bottlenecks in the way of the staff-level agreement regarding the revival of the stalled bailout package.

Highly placed sources told The Express Tribune that Dar would not attend the spring meetings of the World Bank-IMF that were taking place from April 10 to 16 in Washington. Dar, who is also leader of the house in Senate, was planning to land in Washington on Sunday.

“I am not going due to the domestic state of affairs,” the finance minister confirmed to The Express Tribune on Thursday.

The deepening political uncertainty and developing judicial crisis were said to be the reasons behind the cancellation of the trip to Washington. Dar had a plan to address the financial and political worlds’ concerns regarding the continuity of the government, future economic plans and bridging the once again trust deficit with the multilateral lenders.

The sources said that Minister for Economic Affairs Sardar Ayaz Sadiq would also not go to the United States due to the prevailing uncertain political conditions. The economic affairs minister always represented Pakistan at the World Bank. Ayaz was considered very close to Prime Minister Shehbaz Sharif and also handled the political affairs of the allied parties.

The finance minister’s decision to pull out might also lead to cancellation of meetings with his Saudi Arabia counterpart, and the UK state minister for development.

Finance Secretary Hamed Yaqoob Sheikh and Economic Affairs Secretary Kazim Niaz would represent the government at the WB-IMF spring meetings.

A secretary was considered equal to a deputy minister and they might still be able to meet some of the high-ranking foreign officials.

Special Assistant to the Prime Minister on Finance Tariq Bajwa might replace Dar. However, the sources said that due to diplomatic protocol issues, the PM’s special assistant was lower in rank and might not be able to meet with the presidents of various multilateral institutions and finance ministers of different countries.

Dar had scheduled meetings with the presidents of WB, Asian Development Bank and Asian Infrastructure Investment Bank – the three multilateral creditors that were very crucial for Pakistan’s plans to raise $6 billion in additional loans to meet the last IMF condition.

Dar had a confirmed meeting with IMF Deputy Managing Director Antoinette Monsio Sayeh next Thursday but Managing Director Ms Kristalina Georgieva did not give time for the meeting.

In a conversation with The Express Tribune on Thursday, IMF Resident Representative Esther Perez said, “The Pakistan delegation will have a high-level meeting during the spring meetings with IMF’s deputy managing director Ms Sayeh, who follows Pakistan closely.”

Dar was scheduled to begin his trip with an opening meeting with the IMF’s Mission Chief to Pakistan, Nathan Porter, on Monday. The meeting was crucial since Pakistan and the IMF were no more actively negotiating after the government’s sudden fiscally irresponsible move of announcing petrol subsidies.

Although the government claimed that the petrol subsidy would not affect the budget, the plan did not apparently guarantee that.

The sources said that Janet Yellen, the treasury secretary, also had not given an appointment, nor did Waly Adeyemo, the treasury deputy secretary.

Similarly, Samantha Power, the USAID administrator, was also not available for the meeting but a meeting had been scheduled with the assistant administrator of the USAID to South Asia.

Jihad Azour, the director of Middle East and Central Asia Department of the IMF, was also scheduled to meet the finance minister.

The sources said that a meeting had also been planned with the IMF fiscal affairs department aimed at discussing issues like a whopping Rs276 billion shortfall in tax collection during the first nine months of the fiscal year.

The finance minister was also set to meet with the representatives of the three international credit rating agencies that had downgraded Pakistan, which had temporarily closed down the doors for borrowings from international capital markets.

The finance ministry had also lined up meetings with the representatives of the foreign commercial banks aimed at convincing them to provide commercial loans to meet the external financing requirements.

Some of these meetings might still take place.