IMF to dispatch mission to Pakistan after formation of new cabinet

• IMF's total disbursements under SBA stand at $1.9 million.
• Fund approved first review of SBA with Pakistan on Jan 11.
• IMF to work with new govt on policies for macroeconomic stability.

The International Monetary Fund (IMF) is set to dispatch its mission to Pakistan following the formation of a new cabinet to ensure progress on the $3 billion Stand-by Arrangement (SBA) programme with the cash-strapped nation.

The development was announced by the Fund's Communications Department Director Julie Kozack during a press briefing in Washington, DC, on Thursday, where she was questioned regarding the lending institution's assessment of Pakistan’s external financial needs for 2024 fiscal year, calendar year, the size of the IMF's next programme and the kind of risks being assessed by them with regard to the situation in the country.

Responding to the query, Kozack said the IMF Executive Board, on January 11, approved the first review of the Stand-by Arrangement with Pakistan, bringing total disbursements under the Stand-by to about $1.9 million.

"The SBA supported program underpins the authority’s efforts to stabilize the economy with a strong emphasis on protecting the most vulnerable segments of the population," she added.

The Fund's communication director emphasised that the Pakistani authorities, during the caretaker government's period, have maintained economic stability through strict adherence to the fiscal targets while protecting the social safety net, maintaining a tight monetary policy stance to control inflation, and continuing to build foreign exchange reserves.

"And this has been done at the same time as implementing timely adjustments in tariffs to shore up the viability of the energy sector," she said.

Commenting on the IMF mission's arrival in Pakistan, she said: "The IMF stands ready to hold a mission for the second review of the Stand-by shortly after a new cabinet is formed."

Kozack added that the Fund's focus was currently on the completion of the current SBA programme, which ends in April 2024.

"We look forward to working with the new government on policies to ensure macroeconomic stability," said the communications director.

When asked about the Washington-based lender's views on the state of political stability in the country, the IMF official declined to comment but added that the Fund looks forward to "working with the government to ensure stability, macroeconomic stability, for the good of the people of Pakistan".

The announcement regarding the sending of the IMF mission comes at a significant time in Pakistan's economic and political landscape.

Last week, Pakistan Tehreek-e-Insaf (PTI), the party of jailed former prime minister Imran Khan, asked the IMF to factor in the country's political stability in any further bailout talks.

In its letter to the Fund, as per PTI spokesperson Raoof Hasan, the party maintained that the February 8 general elections were subjected to "widespread intervention and fraud in the counting of votes and compilation of results".

"In view of the policies and principles the IMF stands for, there should be no doubt that the abuse of power by a small number of holders of public office to impose their likes and dislikes on Pakistan’s populace as aforesaid, and thus to ensure their continuing personal gain, would not be promoted or upheld by the IMF," PTI alleged. 

Moreover, it said not just the PTI, but several other political parties in Pakistan, along with several western governments, Commonwealth observers, local civil society organisations, and international print and electronic media, have called for an independent probe into claims of intervention and electoral fraud.

"We, therefore, call upon the IMF to give effect to the guidelines adopted by it with respect to good governance as well as conditionalities that must be satisfied prior to the grant of a finance facility that is to burden the people of Pakistan with further debt. An audit of at least thirty percent of the national and provincial assemblies’ seats should be ensured, which can be accomplished in merely two weeks," the letter added.