Esther Perez Ruiz, the resident representative of the International Monetary Fund (IMF) in Islamabad, stated on Monday that the government’s policy commitments to restart the support programme are still in effect.
According to her statement to Reuters, “Policy pledges made by the Pakistani government as part of the seventh and eighth reviews under their IMF-support programme continue to apply.”
After the damage assessment report is made available, she stated that policy conversations will start in the upcoming weeks. These discussions will include how to prioritise assistance to people affected by the floods while ensuring macroeconomic stability.
When asked if the recent drop in fuel costs had been brought up with the lender, the IMF representative responded in the negative.
The IMF’s statement follows the Finance Minister Ishaq Dar’s decision to reverse a policy of monthly price increases through new levies to ensure increased revenues as agreed with the IMF. Dar took over as finance czar from his party member Miftah Ismail last week. He reduced the prices of all petroleum products for the next two weeks by about 5%.
Dar argued that adding more taxes was unnecessary while the nation battled devastating floods that claimed more than 1,600 lives and caused at least $30 billion in damage.
Regarding any potential objections from the lender, he stated, “I have dealt with the IMF for the previous 25 years; I will deal with it.”
Dar made his statement in reaction to criticism from his predecessor, who called the decision to lower levy without first receiving agreement from the IMF “reckless.”
Dar’s response was to tell Ismail not to worry because he knew how to handle the foreign loan.
“Perhaps Miftah sahab was at ease” (in burdening the public). However, I have dealt with the IMF for 25 years. I am the first modest person to have finished an IMF programme. Anyone should not worry, including Miftah Sahab. In an interview with Geo News, he claimed that “it’s between me and the IMF.”
Dar advised Ismail to phone him directly to get clarification rather than making statements in the media. He ought to have called me. I would have told him that’s Solution No. 1, that’s Solution No. 2, and that’s Solution No. 3,” he said in a patronising manner to Ismail, an economist with a PhD from the University of Pennsylvania.
Dar said, “Prime Minister Shehbaz Sharif personally told me that he requested IMF officials suspend taxes to which they did not object during the United Nations General Assembly session, to which Miftah was also there.