US encourages cooperation with IMF

The United States (US) supports Pakistan’s efforts to “break free” from the vicious cycle of debt and financing, a State Department spokesperson has said, urging the new government to continue working with the International Monetary Fund (IMF) and other global financial institutions.

“Pakistan’s new government must immediately prioritise the economic situation because the policies over the next several months will be crucial to maintaining economic stability for Pakistanis,” Spokesperson Mathew Miller told his daily news briefing on Wednesday.

The spokesperson was responding to a question at the daily State Department briefing about a letter sent by ex-Pakistan Tehreek-e-Insaaf (PTI) Chairman Imran Khan to the IMF, suggesting that the next loan facility be linked to an audit of the February 8 general elections in the country.

“I’ll just say, with respect to the IMF, that we support Pakistan’s efforts to break free from the vicious cycle of debt and international financing,” the spokesperson said. “The long-term health of Pakistan’s government – or economy is crucial to its stability,” Miller added.

Pakistan has been facing financial challenges in recent years, with dwindling foreign exchange reserves and declining value of its national currency.

Previously, the PTI had asked the IMF to factor in the country’s political stability in any further bailout talks, it emerged on Wednesday.

Read US wants Pakistan to continue working with IMF

Addressing a news conference in Islamabad, PTI stalwart Barrister Gohar Ali Khan confirmed that the party had sent a letter to the IMF, adding that it would reveal its content after it reached Washington.

Giving hints of what the letter might read, Gohar said the PTI had reminded the IMF of its promise that transparent elections would be held in Pakistan. However, The Express Tribune has obtained a copy of the letter. Addressed to IMF Managing Director Kristalina Georgieva, in the letter, PTI claimed that it did not want to stand in the way of any global lender’s facility for Pakistan.

However, the party stressed the need for the necessary reforms along with the facility to facilitate the repayment of the loans.

“The IMF can negotiate only with an elected government that has the confidence of the people,” it stated. The party urged the Washington-based lender to take into account its policy guidance note prepared in 1997.

“It is a well-established reality that a government without legitimate representation, when imposed upon a country, carries no moral authority to govern, and, in particular, carry out taxation measures.”

APP WITH ADDITIONAL input FROM OUR CORRESPONDENT

Published in The Express Tribune, March 1^st, 2024
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