No talks with IMF, World Bank heads

Finance ministry officials say both heads regretted due to busy schedules

ISLAMABAD:

Pakistan’s finance minister has not yet been able to secure one-on-one meetings with heads of the International Monetary Fund (IMF) and the World Bank on the sidelines of annual meetings of the Bretton Woods Institutions but will meet their next tiers in the hierarchy.

The government had also requested a meeting with the US treasury secretary. Instead, Assistant Secretary for International Finance Brent Neiman would meet Dr Shamshad Akhtar on Friday, according to officials of the Ministry of Finance.

Pakistani authorities requested a meeting with IMF Managing Director Kristalina Georgieva and with World Bank President Ajay Banga. Top finance ministry officials said that both the heads regretted due to their busy schedules.

However, they said that efforts were still being made to get an audience with the top leadership of the IMF and World Bank.

The six-day long annual meetings of the IMF and World Bank began on Tuesday in Morocco. Pakistani delegation comprises Finance Minister Dr Shamshad Akhtar, State Bank of Pakistan (SBP) Governor Jameel Ahmed, Secretary Finance Imdadullah Bosal and Secretary Economic Affairs Dr Kazim Niaz.

Pakistan’s new executive director in the World Bank, Tauqir Shah, was also expected to join the delegation on Wednesday.

These annual rituals have in the past been used for exchanging views with the highest leadership on issues of mutual interest to reach consensus on some outstanding matters.

Former prime minister Shehbaz Sharif and the IMF MD had reached an understanding on a new bailout programme on the sidelines of the Climate Summit in Paris in June. Ministry of Finance spokesman Qamar Abbasi did not respond to questions about the reasons for refusal by the IMF and the World Bank. He also did not respond to the question regarding a meeting with the Chinese finance minister.

First review talks between Pakistan and the IMF are expected to take place next month, although dates had not been finalised as of last week. The country needs over $26 billion in external financing for this fiscal year but its internal assessment shows a financing gap of at least $4.5 billion on account of Eurobonds and foreign commercial loans.

IMF Deputy Managing Director Antoinette Sayeh was scheduled to meet the finance minister, said a senior finance ministry official. Although the World Bank president did not give an appointment, its Managing Director for Operations Ana Bjerde met with the finance minister. Martin Raiser, Vice President of the World Bank for South Asia, is also scheduled to hold a meeting with Akhtar.

Pakistan has budgeted over $2.1 billion in loans from the World Bank for this fiscal year. In a recent media interaction, World Bank Country Head Najy Benhassine said that the lender was poised to disburse $1.5 billion to $1.6 billion in project loans provided there was fast-track implementation of projects.

Benhassine said that a $350 million budget support loan was also at an advanced stage, which would be over and above project lending.

Still, Pakistan will be short of what it has budgeted and an audience at the highest level may help break the ice, including on the timeline for approval of the RISE-II loan.

The finance minister has scheduled meetings with the managing director of Lazard, the global firm working in the area of debt restructuring.

Lazard had approached the finance ministry in the recent past to assist in debt rescheduling, although the government has not acknowledged that it wants to reschedule its external debt.

The finance minister will also meet representatives of the three international credit rating agencies that have downgraded Pakistan, which has increased its cost of borrowing and created obstacles in the way of arranging new foreign commercial loans.

Pakistani authorities are looking for engagements with non-Chinese banks that have in the past given loans but are now reluctant due to the poor credit rating and growing external sector risks. Akhtar is scheduled to meet representatives of Standard Chartered Bank and Deutsche Bank.

The finance minister would also meet with the chairman of the Islamic Development Bank and the president of the Asian Development Bank, the two multilateral lenders that are critical of its plans to meet this fiscal year’s external financing requirements.

She also had confirmed meetings with the finance minister of Saudi Arabia, Iran and vice president for policy of the Asian Infrastructure Investment Bank (AIIB).

AIIB has promised to give a $250 million budget support loan to Pakistan but the window would close by the end of December. AIIB has pegged its loan with RISE-II of the World Bank.

A finance ministry statement said that Akhtar met with Chairman of the Islamic Development Bank (IsDB) Group, Dr Muhammad Sulaiman Al Jasser on Wednesday. The meeting was aimed at fostering discussions on economic cooperation and development initiatives, it added.

Both sides explored various avenues to strengthen financial ties and promote economic growth, underscoring the importance of collaboration between Pakistan and the IsDB.

Akhtar also held a meeting with the governor of the Central Bank of Morocco, it added.

Published in The Express Tribune, October 12^th, 2023.

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