Pasha hits out at IMF, says 'meddling in internal matters not its mandate'

Says 'Plan B' always an option; hopeful to reach an agreement with global money lender before new budget presented

ISLAMABAD:

Minister of State for Finance Dr Aisha Ghaus Pasha termed a statement spelling out conditions to unlock the stalled bailout package by the International Monetary Fund (IMF) as "meddling in internal affairs".

Earlier this week, the IMF had urged Pakistan to follow the Constitution in order to resolve its political disputes, as Prime Minister (PM) Shehbaz Sharif contacted Managing Director (MD) Kristalina Georgieva to revive the derailed $6.5 billion bailout package apparently in a last-ditch effort to avoid default.

The discussion between Shehbaz and Georgieva took place on Saturday after the finance ministry could not break the deadlock over the loan talks during the past four months, official sources told The Express Tribune.

Two days after the highest-level contact was established between Shehbaz and Georgieva, IMF Mission Chief to Pakistan Nathan Porter gave an unusual statement, expanding the IMF’s focus to the political arena.

“We take note of the recent political developments, and while we do not comment on domestic politics, we do hope that a peaceful way forward is found in line with the Constitution and rule of law.”

Read Rupee to fall as IMF urges market rate

The statement came on the heels of an ongoing crackdown against the PTI workers, abductions of people, breach of the 90-day constitutional limit to hold elections in the two provinces and trial of civilians in military courts under the Army Act. Usually, the IMF does not comment on political matters.

In response to questions sent by The Express Tribune, Porter also spelled out the conditions that Pakistan has to meet to reach an agreement with the foreign lender. These include arranging foreign loans, approval of a new budget in line with the IMF framework, and restoration of the foreign exchange market’s proper functioning.

The sources said that the prime minister saw the IMF as the last resort to avoid a default and that was why he decided to intervene. After the conversation with the IMF chief, the premier instructed the finance ministry to share details of the next budget with the IMF.

Speaking to journalists today, however, the minister of state for finance said Pakistan had other options should the deal with the IMF fall through.

"The finance ministry is not unprepared if an agreement is not reached with the IMF," said Pasha, "a Plan B is always in place but our preference would be to go with the IMF programme".

"Pakistan is running in accordance with the law," she stressed adding that "the statement by the IMF mission chief to Pakistan is extra-ordinary."

Read More Efforts on to put economy back on track

"Intervening in Pakistan's internal affairs is not the IMF's mandate," she furthered.

The minister categorically stated that a delay in the resumption of the programme would not be in the interest of both parties, noting that PM Shehbaz has provided assurances to MD Georgieva about Pakistan's commitment to completing the conditions to complete the programme.

"Hopefully we will reach an agreement before the new budget is presented and by June 30, the IMF programme will be completed," said Pasha.

She also noted that the budget of the new fiscal year will be the "election-year budget" and is being prepared on the basis of June 9.

The minister also said that the IMF allows targeted subsidies to Pakistan.