United States
ISLAMABAD: The United States played a vital role in supporting Pakistan to sign a deal with the International Monetary Fund (IMF) last week.
Pakistan and the IMF signed the recent staff-level agreement (SLA) after a delay of eight months.
“The United States supported Pakistan throughout the process but also insisted that they implemented the reforms they agreed with the IMF,” a diplomatic source said.
Foreign Minister Bilawal Bhutto-Zardari held two telephonic conversations with Secretary Antony Blinken over this issue. He also discussed the matter in face-to-face meetings.
Meanwhile, the Embassy of Pakistan in Washington maintained regular contacts with officials at the US Treasury and State Department.
The government and IMF breakthrough, nonetheless, came in June when Prime Minister Shehbaz Sharif held a crucial meeting with the managing director of the IMF Kristalina Georgieva in Paris. Premier asked her to release the critical tranche withheld since November.
Prime Minister thanked China
Moreover, soon after signing a $3 billion deal with IMF, Prime Minister Shehbaz Sharif thanked China for saving Pakistan from default.
He said that the support of China and some friendly countries such as Saudi Arabia and the United Arab Emirates averted default.
PM Shehbaz said that Pakistan was among the countries with the fastest economic growth in 2018.
He said, “Then, Imran Niazi was imposed on the country through the worst rigging,” he remarked.
Shehbaz Sharif again said that the PTI government violated the IMF agreement, and damaged relations with international institutions.
He said that the deal with the IMF would lead to economic revival and stability in Pakistan.
Govt-IMF sign a $3 billion deal
- The IMF staff and the Pakistani authorities have reached a staff-level agreement on policies to be supported by a Stand-By Arrangement (SBA) involving a $3 billion loan. The staff-level agreement is subject to approval by the IMF Executive Board, with its consideration expected by mid-July.
- The new SBA will support the authorities’ immediate efforts to stabilize the economy from recent external shocks, preserve macroeconomic stability and provide a framework for financing from multilateral and bilateral partners.
- The new SBA will also create space for social and development spending through improved domestic revenue mobilization and careful spending execution to help address the needs of the Pakistani people.
- Steadfast policy implementation is key for Pakistan to overcome its current challenges, including through greater fiscal discipline, a market-determined exchange rate to absorb external pressures, and further progress on reforms, particularly in the energy sector, to promote climate resilience, and to help improve the business climate.
An International Monetary Fund (IMF) staff team led by Mr. Nathan Porter held in-person and virtual meetings with the Pakistani Authorities to discuss a new financing engagement for Pakistan under an IMF Stand-by Arrangement (SBA).
