The International Monetary Fund (IMF) has appointed Mahir Binici as the new Resident Representative for Pakistan, as the government intensifies its efforts to secure the approval of a $7 billion loan by the end of September.
This development comes amid growing skepticism regarding the IMF’s intentions. Critics, including Deputy Prime Minister Ishaq Dar, have questioned the global lender’s motives, particularly after the IMF made inaccurate assumptions about Pakistan’s current account deficit during its last two programs and pressured the country to raise new external loans to meet those projections.
Mahir Binici, a Turkish national with experience in Turkey’s central bank and expertise in macroeconomic policies and the financial sector, will replace Esther Perez as the IMF’s country head for Pakistan in December, according to government officials. Perez, a Spanish national, previously served in her home country’s Ministry of Finance. The IMF has declined to comment on the changeover or confirm whether Perez’s tenure has ended.
Binici’s primary challenge will be overseeing the implementation of the $7 billion Extended Fund Facility (EFF), an ambitious program that faces significant risks even before the IMF’s Executive Board has approved it. Despite earlier statements from central bank governor Jameel Ahmad suggesting that Pakistan would secure the board’s approval in the first half of September, a senior government official has now indicated that the government is targeting the fourth week of September for approval.
Pakistan’s case was not included on the IMF board’s calendar for meetings through September 18, after the country was delisted in August for failing to secure rollovers on $12 billion in cash deposits and arrange an additional $2 billion in new financing.
Another key challenge for Binici will be restoring trust and strengthening the IMF’s Pakistan office as a bridge between Islamabad and the IMF’s Washington headquarters, rather than merely serving as an extension of the latter.
In recent years, the IMF has faced a growing trust deficit with the Pakistani government, experts, and the public, who partly blame its conditions for the country’s slow economic growth, the power sector’s losses, high unemployment, and increasing poverty.
The IMF is often seen as a lender of last resort, and it has imposed a condition on Pakistan to first secure $2 billion in loans from other creditors in order to qualify for its board meeting approval.
