Pakistan government wary of IMF-mandated ‘tough decisions’ in election year – Times of India

ISLAMABAD: The verdict PML-N PartyFears of losing popularity ahead of elections later this year appear to preoccupy the government with finalizing a much-needed deal with the IMF that could stabilize the ailing economy, according to a media report on Tuesday.
Official and diplomatic sources told Dawn newspaper that both sides were still discussing the seven demands the International Monetary Fund wants Pakistan to accept before resuming economic aid to the country.
The demands include the withdrawal of electricity subsidies, pegging gas prices to the international market and free-floating dollars.
The pronounciation Pakistan Muslim League (Nawaz) (PML-N) “Fear that the implementation of some of these demands will drive up the price of essential items across the board,” a source told the paper.
“It will make the government even more popular than it already is, so close to the election.”
General elections in Pakistan are scheduled after August. However, Pakistani Chairman of Tehreek-e-Insaf (PTI) and former Prime Minister of Pakistan Imran Khan demands rapid polls.
Cash-stricken Pakistan last year revived a stalled $6 billion IMF program that was initially agreed in 2019 but is finding it difficult to meet the Washington-based global lender’s tough terms.
There are reports that the IMF may not release more funds under the program until the government’s commitments are fulfilled.
The IMF board approved the seventh and eighth reviews of Pakistan’s bailout program in August, releasing more than $1.1 billion.
Pakistan’s energy regulator has already authorized Sui Northern Gas Pipeline Ltd (SNGPL) and Sui Southern Gas Company (SSGC) to raise rates by up to 75 percent, subject to cabinet approval.
Islamabad is awaiting the 9th revision of a loan agreement signed by the previous government with the IMF. The review would lead to the release of the next tranche of funds to Pakistan, which has been pending since September.
IMF officials have indicated their willingness to continue working with Pakistan, but the country must first meet some basic requirements.
“They are asking for basic supplies so they can send their team to Islamabad, but the finance minister is hesitant to do that,” said an official who was aware of the talks.
The official said the IMF was asking for “some movement in energy prices and the demonstration of Islamabad’s intent to reform, but Finance Minister Ishaq Dar is not budging an inch.”
Officials in Islamabad urged Prime Minister Shehbaz Sharif to intervene before it is too late. “This could have been completed four months ago,” said another official.
The official said he “personally doesn’t expect much before a concierge setup takes over downtown.” Asked why, the official said, “Dar Saheb will not allow the exchange rate to go to market levels.”
And if “we don’t have an IMF program, the situation will not normalize,” he added.
Another official told Dawn in Islamabad, “If Pakistan waits for the caretakers to hold talks with the IMF, it will be a disaster.”

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