Pakistan on Tuesday engaged three major International Monetary Fund (IMF) shareholders for support in seeking $7 billion economic bailout package and quashed rumours about any imminent financial emergency in an attempt to pacify jittery markets.
Finance Minister Ishaq Dar and his team had back-to-back meetings with Islamabad-based top diplomats of the US, China, and the UK, having 16.5 per cent, 6.08pc and 4.03pc voting rights in that order, and took them into confidence over the economic challenges mostly caused by exogenous factors and difficulties in dealing with IMF staff.
Japan, Germany, and France are three other leading voting powers in IMF’s executive board with 6.14pc, 5.31pc and 4.03pc votes.
Rejects rumours about financial emergency
The diplomats and the markets were assured that Pakistan was committed to the IMF programme despite all the difficulties and there was no truth to the economic emergency in the offing.
While hinting at energy conservation measures in the offing, the finance minister appeared to be dispelling an impression arising out of one of his interviews that IMF was behaving abnormally in seeking forward-looking benchmarks for next quarter and he would not beg IMF as all conditions of the ninth review had been completed.
The economic team that also included Special Assistant to the PM on Finance Tariq Bajwa and Finance Secretary Hamed Yaqoob Shaikh had separate meetings with US Ambassador Donald Blome, Chinese Ambassador Nong Rong and British High Commissioner Christian Turner along with UNDP consultant Sir Michael Barber on Tuesday.
Separately, the finance ministry ‘strongly’ rebutted romours about economic emergency proposals in social media and ‘categorically’ denied there was any planning to impose economic emergency.
“The message is unfortunately aimed at creating uncertainty about the economic situation in the country and can only be spread by those who do not want to see Pakistan prosper,” the ministry stated.
It was far-fetched and quite inappropriate to equate Pakistan with Sri Lanka, given inherent strength and diversity in Pakistan’s economy.
“The present difficult economic situation is mainly the result of exogenous factors like commodity super-cycle, Russia-Ukraine war, global recession, trade headwinds, Fed’s increase in policy rates and devastation wreaked by unprecedented floods,” the statement elaborated.
It said austerity measures would eliminate non-essential expenditure and the ministry was deliberating on energy conservation to reduce the import bill.
“Such deliberations will continue in the cabinet and all decisions will be taken in consultation with all stakeholders and in the best national interest,” it said, adding that negotiations with the IMF on ninth review were “now at an advanced stage”.