Dar once again rules out possibility of default

Finance Minister Ishaq Dar on Saturday once again ruled out the possibility of Pakistan's default and promised that reforms are in the works for the country’s “long-term improvement”.

Talking to a delegation of the Karachi Chamber of Commerce and Industry in Islamabad, the financial czar vowed to collectively steer the country out of current economic challenges.

Dar further stated the Ministry of Finance will bring an agricultural revolution and will also establish a sovereign wealth fund. He said that the IT sector will also be a focus, adding that he is determined to take steps that were ignored in the past.

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The finance minister also informed the delegation that the delay in the International Monetary Fund (IMF) programme is unprecedented as there is 'no technical reason behind it'.

“Pakistan is a sovereign country having assets worth trillions of dollars,” he maintained.

Dar added that the country's external liabilities are around $100 billion but at the same time, only one asset - gas infrastructure - is worth around 40 to 45 billion.

The finance minister also asked the business community to put forward reasonable demands with regard to the upcoming budget, assuring the government will cooperate with them.

The comments by Dar come as a cabinet member revealed a day earlier that the global lender has rejected Pakistan’s request to lower the requirement of arranging $6 billion in new loans, leaving the government with no alternative but to try and revive the deal.

In a policy statement during the National Assembly Standing Committee on Finance, Minister of State for Finance Dr Aisha Pasha emphasised that returning to the IMF was Pakistan’s only option.

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According to Dr Pasha, Pakistan requested the IMF to consider reducing the $6 billion external financing requirement based on new current account deficit data, but the Fund did not agree. She explained that there was an understanding to arrange $3 billion before the staff-level agreement and the remaining $3 billion after the agreement, but the IMF was insisting on “demonstrating the $6 billion.”

Despite a call by Prime Minister Shehbaz Sharif to IMF Managing Director Kristalina Georgieva, the IMF has not changed its stance, as indicated by the minister of finance’s statement.

Of the total $6.5 billion bailout package, the IMF has disbursed $3.9 billion over the past four years, with the remaining amount contingent upon the completion of three pending reviews.