Pakistan: Finance Minister Dar To Lead High-level Delegation To US For Bailout Talks

Pakistan's Finance Minister Ishaq Dar will be leading a high-powered delegation to the US to attend the annual spring meeting of the IMF and the World Bank and for talks with officials which can help the cash-strapped country to ink a much-needed USD 1.1 billion bailout with the IMF. Dar along with an official delegation comprising the Finance and Economic Affairs Division secretaries and the State Bank of Pakistan (SBP) governor, might present fresh proposals before the IMF and World Bank for providing dollar inflows, Geo news portal reported.

The delegation will be attending the upcoming Annual Spring Meeting of the Breton Wood Institutions (BWIs), known as the International Monetary Fund (IMF) and World Bank, from April 10 to 16, the report added. During the meetings, Pakistan and the IMF would also discuss the possibility of combining the remaining 10th and 11th reviews under the USD 6.5 billion Extended Fund Facility (EFF) programme in case the pending 9th review is completed. Cash-strapped Pakistan is awaiting a much-needed USD 1.1 billion tranche of funding from the Washington-based IMF, which was originally due to be disbursed in November last year.

The funds are part of a USD 6.5 billion bailout package the IMF approved in 2019, which analysts say is critical if Pakistan is to avoid defaulting on external debt obligations. The IMF programme, signed in 2019, is going to expire on June 30, 2023, and under the set guidelines, the programme cannot be extended beyond the deadline. The pending 9th review was scheduled to be completed in December 2022 and the 10th review should have been kick-started from February 2023. The 11th review was scheduled to commence on May 3. Pakistan and the IMF have been negotiating the resumption of an installed USD 7 billion IMF programme for months but have yet to reach an agreement.

There is no easy solution available to fix the ailing economy of Pakistan and the government is of the view that they have taken all the tough decisions for reviving the stalled IMF programme. Pakistan, currently in the throes of a major economic crisis, is grappling with high external debt, a weak local currency and dwindling foreign exchange reserves, enough to shore up for barely one month's imports. The current volatile political situation in Pakistan has become a factor in delaying a much-needed deal with the IMF.